Why rising interest rates are bad news
Accounting, Finance and Economics 26 January 2016
Using a time series dataset from more than eighty countries, Ola Sholarin highlights the possible impacts of an increase in interest rates in the USA on the global economy in a recent article. He explains how the $12 trillion injected to stimulate consumption within the global economy, has created an unprecedented amount of cheap and dollar-denominated credit facility bubbles across the globe, and he argues that an increase in the cost of such credit facilities will almost certainly trigger margin calls and other credit events, which are capable of exacerbating the financial conditions of the already-fragile economies outside Europe and America.
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