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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Jan 31 2014

Assessing Eurozone Deflation Risks

Remaining “uncomfortably” low, year-over-year growth in the Eurozone harmonized CPI now stands at 0.7%, well below the European Central Bank’s 2% target. ECRI’s research has, for some time now, highlighted the risk that major economies like the U.S. and the Eurozone, which are experiencing low trend growth and falling inflation, will resemble Japan during its lost decades. Although the consensus has ruled by decree that this is not happening in the U.S., despite the fact that its harmonized inflation rate remains persistently low like the Eurozone, fears of Eurozone deflation have now become widespread.

ECRI’s latest report reviews key economic aspects of the major Eurozone economies, providing a definitive guide to the likely path for inflation as well as growth in exports, business investment, and employment in the months ahead. Revealing a marked divergence in disinflation pressures in the Eurozone’s core and periphery, it contains crucial insights for those concerned about the future trajectory of euro-area inflation.

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Secular Stagnation

Fox Business News January 22, 2014

GDP growth (yoy) has been less than 2% for four straight quarters, something we’ve never seen except during or right after a recession. More