The economics professor has urged other central bank's to follow Israel's lead.
Bloomberg has reported that New York University economics professor Nouriel Roubini, who forecast the global financial crisis in 2006, has recommended that other central bankers should consider following the Bank of Israel lead. Roubini said that the world economy already faces the chance of another credit bubble as investors take advantage of low US rates to borrow in dollars to buy higher-yielding assets such as equities and commodities.
He added, “That’s actually a signal to other central banks. While of course they have to worry about recovering growth and avoiding deflation, by keeping interest rates at zero and massive quantitative easing, we risk creating another asset and credit bubble.”
Yesterday Bank of Israel Governor Stanley Fischer raised Israel's interest rate by 25 basis points to 1%.
Published by Globes [online], Israel business news - www.globes-online.com - on November 24, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009
Eran Peer and Irit Avissar