Why is inflation below target in so many advanced economies?

Exploring the misperceptions and the facts about inflation

Time to read: 3 min

Since the global financial crisis, inflation in the advanced economies has persistently undershot their 2% targets despite unprecedented quantitative easing (QE), extraordinarily low interest rates, large fiscal deficits and near all-time low unemployment.

US Federal Reserve (Fed) officials have explained that the weakness of inflation in 2017 is due to the reduction in the price of mobile-phone data charges. Similar one-off explanations such as commodity price weakness or technology-induced declines in prices have been also used in Japan and the eurozone to explain sub-target inflation. In this article, I will explore two mistaken theories of inflation and explain the true reasons behind inflation’s benign trend.

The misconception of fiscal deficits


Argentina: Will the reforms in place pay off?

The new administration has introduced some sound economic policies, but can the country shake its Peronist past?

Time to read: 4 min

About 100 years ago, Argentina was one of the wealthiest countries in the world by virtue of its fertile land. Its economy thrived by shipping beef and grains around the world. But economic and political turmoil through the 1930s sowed the seeds of populism — the effects of which have lasted decades. With the 2015 election of reformist candidate Mauricio Macri as president, Argentina seems to have the best chance of regaining the prosperity it once enjoyed. Will the populace (and its leaders) have the patience and fortitude to allow market reforms to work? The midterm legislative elections in October will provide a critical test.

The legacy of Juan Peron        

One cannot understand today’s Argentina without explaining the legacy of its most iconic figure, Juan Peron.


How Ireland’s economy rebounded after the financial crisis

The “Celtic tiger” now leads the eurozone in growth

Prior to the global financial crisis (GFC), Ireland’s economy was a stellar performer, earning the country the moniker of “Celtic tiger.” The onset of the GFC caused a major economic contraction and a housing crash — but today, Ireland is once again the fastest-growing economy in the eurozone. In this blog, I examine the key elements that allowed Ireland to regain its footing.

Key components of the recovery 


Turkey: An economy at a crossroads

Its past included strong growth. Its present is in turmoil. What might the future hold for Turkey?

John GreenwoodIt is not a stretch to say that Turkey is beset by troubles both external and internal. Syria’s civil war to the south has caused an unanticipated economic and social strain on the country, and fears of continued terrorism have slowed the engine of tourism. Meanwhile, the government is seeking to bolster its power after an unsuccessful coup attempt last July. How the country handles these myriad issues could set the stage for either an economic recovery or a further descent into crisis.

Syrian civil war stresses

Turkey shares a 500-mile border with Syria, and it is estimated that over three million refugees have found their way north since hostilities began six years ago. Absorbing such an influx would be


Could hyperinflation be next for Venezuela?

Why we are likely witnessing the end of ‘Chavismo’

We’ve all seen the news reports – lines for food and basic staples that stretch for blocks, increasing violent crime, kidnappings and corruption are making day-to-day life in Venezuela a real struggle. It wasn’t always like this, but in the past 20 years Venezuela has gone from one of the richest countries in South America to one of the poorest. To make matters worse, the country is now in the throes of near hyperinflation reminiscent of post-WW1 Weimar Germany or Zimbabwe in the years before dollarization in 2009.

How could a country blessed with abundant natural resources, tropical weather and nearly 1,800 miles of Caribbean coastline descend into chaos so quickly? And what will the future hold for Venezuela?