Monday, March 25, 2013
Bernanke Says Easing by Advanced Nations Helps World Economy
This article talks about a lot of the things we have learned about when it comes to interest rates, trade deficits, unemployment, growth and more. Bernanke talks about his plans domestically and how the interest rates here will remain this low as long as unemployment rate is above 6.5% although they are lowering and the outlook on inflation is below 2.5%. In the article it talks about how other countries are taking the low interest rate approach as their goal is growth as well and they are using growth as a focus rather that using it to focus on trade exchange rates. But, overall, Bernanke sees this approach as a benefit to the world economy.
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It is very interesting how class topics can be seen in other aspects of the news. I too saw this article and found it interesting how Bernanke was explaining his approach to low interest rates. It is pretty interesting that our low interest rate basis is the model for other small developing nations seeking growth. I never really thought of the US as being a model for growth in other nations, but after reading into Bernanke's explanation.
ReplyDeleteLow interest rates makes borrowing money much more affordable and thus more people will borrow and more money will be flowing through the economy. In addition, not many people are putting their money into savings at these low interest rates so that also adds to the money flowing through the economy. I like Bernanke's approach and I believe that it will continue to work.
ReplyDeleteHow the United States is performing economically is a good barometer of how the economy of the world is doing. So it makes sense that other countries would try to implement the same policies as we are using. So the low interest rate and inflation, are good signs for the economy.
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