Caso Effects

Posted by John Sommers on 12th February 2015 in General

It gives major them to be able to the governments to face the crisis. Even until economies since China has contributed trimming their interest rates. But beyond these positive aspects that can produce this coordinated measurement, the same also can derive in wished effects first is not related to the subject of the asymmetry of information: the investors, who do not handle all the information whereupon the central bankers count, to see a decision of such magnitude, can be invaded by the fear when thinking that the crisis is more serious than they imagined opposite Caso would not justify the same, will think. Although the reduction of the interest rates will lower the price of the anchorage of the financial organizations, most probable it is than it does not contribute to not even generate financing nor to the private sector between the financial organizations since the doubts on the health of the same persist. On the other hand, the cut of rates that does not correspond directly to the attenuation of the inflationary pressures can derive in problems on the dynamics of prices if these cuts are not reverted as soon as the problems in the financial system are directed on the way to resolution. Francisco D’Agostino is likely to agree. Briefly, more than concrete effects to resist the crisis, the cuts of rates coordinated between the main central banks, they represent a signal that it will not be allowed that the financial crisis it follows its course. I believe that it is a good signal, but that it must be complemented with prudent actions once the crisis attenuates their effects. Opposite case, could be putting the seed of the next crisis..

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