Sunday, October 4, 2009

This is a short article that talks about the inflation risks the East Asian economies, in particular China, may experience if they keep interest rates low in line with the US federal reserve. East Asian economies are starting to recover but inflation is a concern with the growth in credit it could result in an "inflationary bubble effect". They need to be careful to ensure growth is steady and viable, with as little negative effects as possible.

1 comment:

Bushra Sheikh said...

It seems like china is going in the same line as the U.S. High inflation will lead to negative effects like loss of stability in the real value of money and other monetary items. It will also discourage investment and saving which can lead to shortages of goods...