Economic recovery will be gradual
After the global recovery picks up steam, there are those in the insurance and reinsurance industry who fear that rising inflation could erode company returns and capital.
But Sean MOONEY, Guy CARPENTER's New York Based chief economist, believes that the US Federal Reserve and central banks in Europe and elsewhere will be able to effectively "mop up" the excess liquidity before inflation becomes a real problem.
"In my own humble opinion, I think they (central banks) will be effective", said MOONEY. "They will be able to credibly pull in the excess liquidity in the marketplace and contain the inflation rate".
MOONEY disagrees with those who believe that the global economy could slip back into recession.
"There is a lot of talk about it being a W-shaped economy", he said in an interview. "I think this is more like a U-shaped recovery or a very wide V-shaped recovery". That is because the recession has been "relatively deep" and the recovery "so far looks like it will be fairly gradual".
Published on 29.10.2009
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