Can monetary policies help prevent a global recession?

Monetary stimulus merely postponing the inevitable

Are we about to have a global recession? That was one of the many issues discussed at the recent Singapore Summit – a meeting of global policymakers and business leaders.

There was a mix of opinions on the subject, which was also reflected in a recent survey undertaken by Absolute Strategy Research. They questioned more than 200 financial institutions and found 52% anticipated a downturn within the next 12 months. But the likelihood of a recession within the next year is not certain. Recent actions by the US Federal Reserve and the European Central Bank (ECB) illustrate their policymakers' determination to support waning economies. Yet the tools at their disposal are limited after a decade of monetary policy loosening. The Fed recently cut base rate...