Unintended consequences of stimulus policies

Policy measures pursued in one part of the world may be “filtered, warped and distorted in other parts of the world, giving rise to a set of completely unintended consequences”, according to Stephen King, HSBC’s group chief economist.

Quantitative easing has had such “unintended consequences”, he told media at the bank’s Asian Outlook 2011 conference at Hong Kong’s Marriott Hotel on Friday.

The main effect of stimulus policies in the US and Europe employed both as an immediate response to the credit crisis and again in the autumn 2010 -- has been in the emerging world because of its smaller debt levels, lower per capita income income elasticity is stronger in emerging countries...