State of Louisiana
Department of the Treasury
Larry Hatheway | Chief Economist, UBS Investment Bank | GBR
Recent inflation and labour market data from advanced and emerging economies provide insights into price and wage dynamics across the world economy. The main message is pretty simple. There is scant evidence of broadbased increases in prices and wages. Apart, that is, from those countries where inflation has been persistently high for years. Moreover, as my colleague Andy Cates has frequently pointed out, inflation outcomes—on average—continue to come in below consensus expectations. QE isn't causing more inflation because it's not increasing the supply of transactions money very much, so demand isn't outstripping supply, so output gaps aren't narrowing much. We don't see this changing next year, or even in 2015.
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