Coupling Can Be Good for You

Article Abstract:

The rise in American interest rates has been the cause of increasing capital from Europe and Japan to be invested in the United States. Foreign finance ministers and central bankers are uncertain how to deal with the situation. To act independently, ignoring what happens with American interest rates, would very likely lead to rising inflation. Tying interest rates to American rates would result in a short term output slump, deepening the recession. Britain, West Germany and Japan tightened domestic monetary policies, causing rising interest rates and lower dollar exchange-rates in 1981. The American dollar may soon weaken, but action is unpredictable until it actually happens. Independent economic policies have international effects. Coordinations of interest and exchange rates can be advantageous at the price of independence.

Europe, Economic aspects, Prices and rates, Economic policy, Foreign exchange, Foreign exchange rates, Interest rates

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Tebbit's Dilemma

Article Abstract:

Britain's Industry Minister Norman Tebbit wants to cut ineffective capital investment subsidies. Regional aid is a very touchy issue. Tebbit's possible suggestions are listed.

United Kingdom, Laws, regulations and rules, National government, Industrial districts, Federal government

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