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How to get global growth back

Market Commentary

15 October 2015

The IMF recently revised down global growth. After years of Quantitative Easing (QE) and a now weakening US economy, it is no longer clear what can be done to raise growth rates. Policy makers in developed economies have largely run out of ammunition and appetite for reform is non-existent. How can global policy makers get the global economy back to positive momentum? Here is a suggestion. The Fed and other QE central banks should embark on a modest program of Emerging Markets (EM) asset purchases, notably local currency government bonds and infrastructure investments. As a complement to asset purchases, the Fed may have to consider introducing negative policy rates as well.

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