Some central bankers have been as spooked as markets by the signs of late that global growth will disappoint.
Turkey’s central bank cut rates to an all-time low despite credit growth of 40 per cent, and the South African Reserve Bank’s Gill Marcus warned of more social unrest if world leaders failed to get a grip.
Officials in Australia are rather less concerned, however, that events elsewhere will hinder growth prospects at home. Read more
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A busy week is in store for Jean-Claude Trichet.
On Saturday, the ECB president will speak at Jackson Hole at 17:00 GMT. On Monday, Mr Trichet travels to Brussels, where he will field questions from the European parliament on how to restore market confidence (some suggestions from Ralph Atkins and Chris Giles).
The president will be joined by Jean-Claude Juncker, Eurogroup president, Jacek Rostowski, Poland’s finance minister and Olli Rehn, the European commissioner for economic and monetary affairs. The hearing takes place at 13.00 GMT.
On Thursday, ECB executive board member Jürgen Stark is a participant in a panel on Europe and global competition. Read more
The monetary policy parts of Ben Bernanke’s 2011 speech in Jackson Hole read as a carefully calibrated attempt to aim off his 2010 speech, and send a signal that the Fed is willing to do more, but that the scope for further action is less than it was a year ago.
The main statement of the Fed’s willingness to act is:
“The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability.”
Compare that with the 2010 equivalent: Read more
The first paper of Jackson Hole 2011, by Harvard economist Dani Rodrik, is about economic convergence. It’s a neat and very accessible summary of recent research by Mr Rodrik, his collaborators and colleagues about the vexed question of why poor countries do not catch up with the rich. There’s a lot in there, but here’s a brief summary of some of the most interesting and original points.
Gaps between rich and poor countries are as high as they’ve ever been, but before the financial crisis, they’d started to come down