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Article: The zero option: price stability.
- Article from:
- The Economist (US)
- Article date:
- August 22, 1992
CopyrightCOPYRIGHT 1992 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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If industrial economies are moving towards an era of price stability, what are the implications for investors?
IN THE 1990s inflation in industrial economies is likely to fall to its lowest level for three decades. Several governments have even committed themselves to the goal of price stability. How will this affect the relative merits of different investments?
Tangible assets, like property, gold and works of art, will be less attractive when there is no inflation to dodge. But what about the choice between equities and bonds? Equities have outperformed bonds in almost every year since the second world war. Since 1950 the return on equities in America and ...