In his Financial Times article “The curse of weak global demand,” Martin Wolf writes that today’s most important economic illness is chronic demand deficiency syndrome. Wolf argues that despite massive monetary pumping by the central banks of the US and the EMU, and the policy of lowering interest rates to around zero, both the US and the EMU, economies have continued to struggle.
We Need More Demand and More Lending
Martin Wolf is of the view that what is needed is to raise the overall demand for goods and services in order to revive economies. He also holds that there is a need to revive consumer confidence that was pulled down by the severe weakening of the financial system.