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Research - JANUARY 10, 2020

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How is central banking activity affecting Asian property markets?

by Benjamin Cole

As 2019 waned, Asian institutional property investors, like their brethren around the world, were treated to a series of glum global economic forecasts from the likes of the International Monetary Fund, the World Bank, and the Organization for Economic Cooperation and Development. The experts appeared to agree slower economic growth is baked into the cake for 2020, in a world too highly leveraged yet challenged by rising protectionism.

A disconcerting second dirge arose alongside this first downbeat chant: Central bankers have worn their tools to a nub and cannot stimulate economic growth much more. The central bankers’ conventional tool, of course, has been lower interest rates, but rates are already negative in much of Europe and in Japan. The central bankers’ second, and newer, tool has been quantitative easing, the effectiveness of which is debated. “The monetarist era is over,” declared Dutch money manager ING late in 2019. “Central bankers have been the first

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