Ending easy money will need economic adjustments: Leaders at

Image
Press Trust of India Davos
Last Updated : Jan 26 2018 | 8:15 PM IST
Ending easy money supply will be difficult and require significant economic adjustments, business leaders said today here at the World Economic Forum.
On the last day of the World Economic Forum (WEF) annual meeting, the leaders and experts said inflation rates are linked to the low-wage growth in much of the developed world, while some of them warned of a possible future downturn despite easy money having led to rise in GDP and stock markets.
The easy money policies have seen several central banks having infused trillions of dollars into the system to revive the markets since the global financial crisis of 2007.
Swiss banking giant UBS' Chairman Axel Weber said, "We are in pretty unchartered territory. Exiting from QE or Quantitative Easing will be a difficult exercise."
European Central Bank Executive Board Member Benoit Coeure said the QE has been a resounding success in the US, EU, Sweden and everywhere with the strongest recovery for the past 20 years.
However, the recovery has raised a question for some central bankers on how can it be that "we have injected so much money into the system, and inflation is still weak," he said while participating in a panel discussion here.
Some experts pointed out that low inflation rates are also linked to the low-wage growth that much of the developed world is experiencing.
"As an employee, you will ask for a higher salary when you have the opportunity to do it," Swedish Central Bank Deputy Governor Cecilia Skingsley said.

Disclaimer: No Business Standard Journalist was involved in creation of this content

*Subscribe to Business Standard digital and get complimentary access to The New York Times

Smart Quarterly

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Exclusive premium stories online

  • Over 30 premium stories daily, handpicked by our editors

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

First Published: Jan 26 2018 | 8:15 PM IST

Next Story