Michael Dicks is managing
director and chief economist,
Europe, for Lehman Brothers in
London. In this role, he has
focused on raising the technical
level of economics research carried
out in City institutions to make it
comparable with best-practice in
central banking—by, for example,
using large-scale macro-econometric models for
forecasting and simulation. Previously he worked at the
Bank of England and J.P. Morgan. He received his
B.Sc. and M.Sc. from the London School of Economics.
The recent behaviour of the U.S. economy poses two
conundrums: short-term interest rates are much lower
than would normally be expected, and the yield curve is
flat. These suggest to many European observers that
U.S. economic prospects are not as rosy as often depicted.
In particular, deficits in the federal budget and the
current account are not sustainable in European eyes;
and significant Fed tightening will be necessary, thus
causing a significant deceleration of U.S. growth.
by Michael Dicks