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Inflation-Free Growth Is Too Good to Last

Inflation and higher interest rates could cool world markets

By Sam Gale Rosen, Newser Staff

Posted Jun 6, 2007 2:54 PM CDT

(Newser) – Globalization and access to low-cost labor has allowed the world economy to grow without high inflation, but this economist's dream may soon end, the Wall Street Journal predicts in a cautionary report. Demand for everything from workers to lumber is increasing, raising prices—and the prospect of higher inflation.

This would lead central banks to pump up interest rates, cooling down world markets. The high demand stems from companies all over the world operating close to capacity. "Markets have gotten used to the idea that the global economy will keep producing downward pressure on prices," says economics professor Ken Rogoff. "But that phase may be ending."

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Inflation-Free Growth Is Too Good to Last

Inflation and higher interest rates could cool world markets

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inflation • globalization • labor • global economy • US economy • interest rate

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Burgeoning Interest Rates Threaten to Stifle Recovery

Demand for refinancing shrivels as 30-year rates hit 5.75%

US Trading Partners See Huge GDP Falls

Mexico contracts 21.5% as American demand dries up

Wait on Rate Hikes Until Crisis Eases

Fed should ignore critics, hold its ground until markets rebound

Fed Sees Slower Growth, Higher Unemployment

Reserve officials sharply reduce economic forecast

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Minutes from last meeting display growing concern about markets

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Inflation-Free Growth Is Too Good to Last

Inflation and higher interest rates could cool world markets

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OTHER STORIES ON OUR RADAR

inflation • globalization • labor • global economy • US economy • interest rate

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Burgeoning Interest Rates Threaten to Stifle Recovery

Demand for refinancing shrivels as 30-year rates hit 5.75%

US Trading Partners See Huge GDP Falls

Mexico contracts 21.5% as American demand dries up

Wait on Rate Hikes Until Crisis Eases

Fed should ignore critics, hold its ground until markets rebound

Fed Sees Slower Growth, Higher Unemployment

Reserve officials sharply reduce economic forecast

Fed Remains Open to More Rate Cuts

Minutes from last meeting display growing concern about markets

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?