Ending easy money supply will be difficult and require significant economic adjustments, business leaders said today here at the World Economic Forum.
On the last day of the World Economic Forum (WEF) annual meeting, the leaders and experts said inflation rates are linked to the low-wage growth in much of the developed world, while some of them warned of a possible future downturn despite easy money having led to rise in GDP and stock markets.
The easy money policies have seen several central banks having infused trillions of dollars into the system to revive the markets since the global financial crisis of 2007.
Swiss banking giant UBS' Chairman Axel Weber said, "We are in pretty unchartered territory. Exiting from QE or Quantitative Easing will be a difficult exercise."
European Central Bank Executive Board Member Benoit Coeure said the QE has been a resounding success in the US, EU, Sweden and everywhere with the strongest recovery for the past 20 years.
However, the recovery has raised a question for some central bankers on how can it be that "we have injected so much money into the system, and inflation is still weak," he said while participating in a panel discussion here.
Some experts pointed out that low inflation rates are also linked to the low-wage growth that much of the developed world is experiencing.
"As an employee, you will ask for a higher salary when you have the opportunity to do it," Swedish Central Bank Deputy Governor Cecilia Skingsley said.
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