The eurozone is in a bind. Despite successive doses of monetary stimulus by the European Central Bank, inflation remains stubbornly below target. Conventional monetary policy, and even quantitative easing, evidently have limited potency when interest rates are at or near zero. Monetary sceptics worry that lowering rates further will damage Europe’s banks. Additional asset purchases beyond the monthly level of €20bn (£16.8bn) already agreed, they warn, will impair the liquidity of financial markets. By pushing up asset prices, the ECB could expose the financial system to stability risks when those lofty prices return to earth. The obvious event precipitating this return would be a recession. And when this downturn materialises, the ECB will have limited room for offsetting action, again because interest rates are already low. The solution to this conundrum suggested by the ECB president, Christine Lagarde, is greater reliance on fiscal policy. By purchasing government … [Read more...] about Can the eurozone economy be revived without budget deficits?
Five people have been confirmed dead after Monday’s fatal eruption on White Island/Whakaari in New Zealand and eight are confirmed as missing. It is believed there were 47 people on the island at the time of the eruption, 38 of them from the cruise liner Ovation of the Seas. Thirty-one people are believed to be receiving medical care in facilities across New Zealand, many for burns. New Zealand police said there were 47 people on the island when the volcano erupted. They comprised of 24 people from Australia, nine from US, two Britons, four from Germany, five from New Zealand, two from China and one from Malaysia. The New Zealand Red Cross has issued a list of people who have registered themselves as alive, and those who have been missing since the eruption. You can see the full list here although some people listed as missing have now been found alive in hospitals in New Zealand. The missing Anthony and Kristine Langford and their teenage children, Jesse, 19 and Winona 17, from … [Read more...] about ‘He loved life’: students, families and guides missing after White Island volcano disaster