pull down to refresh
21 sats \ 1 reply \ @xz 20 Feb \ parent \ on: China Takes Preemptive Measures to Combat Deflation econ
Not sure I understand the ramifications of macro spillover, or as it used to be put, catching a cold and the world sneezing. But if I can believe the FR knows what it's talking about.
".. expansionary shocks to China’s credit lead to a decline in aggregate risk aversion, associated with a lower VIX, which elevates global asset prices and credit"
https://www.federalreserve.gov/econres/ifdp/files/ifdp1360.pdf [6/59]
Guessing this means that on the flip this would telegraph the opposite but then again we see a frequent about turn of interest rate policy.
I agree it's all about avoiding domestic discontent.