[IMF ON TRADE POST-FINANC
By[IMF ON TRADE POST-FINANCIAL CRISIS] Ahead of annual IMF/World Bank
meeting (Oct 8-10), IMF has released chapters 3 & 4 of its "World Economic
Outlook" (WEO). In Chap 4, it studies the impact of financial crisis on
trade, looking at 40 yrs of historical data. It found that imports tend to
decline sharply in the first 2 years after such a crisis and remain
depressed over the medium-term. In contrast, exports are relatively
unaffected. The study also noted that imports in countries that had a
major banking crisis as US may stay below pre-crisis trends for several
years and warns that countries that rely heavily on demand from crisis-hit
countries in the past will need to bolster domestic demand to offset –
China are you listening?, Japan too?
18:54 GMT – [BERNANKE TAKES QUESTIONS, TALKS ECONOMY] Fed Chairman Bernanke is
taking questions, and talking about the economy and policy. He says the
Fed needs to do its part to help the economy recover, and to ensure price
stability in the long term. (With the most recent FOMC statement noting
the risk of a prolonged period of inappropriately low inflation,
Bernanke's mention of price stability need not be seen as hawkishness.)
Bernanke says the economy is moving in the right direction, but that there
is an "air of caution" among households and businesses which is slowing
growth. He also says the US is in a difficult fiscal situation
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