From domestic Irish politics to EU climate policies and to the central US-China relationship in world politics, the war in the Middle East is having repercussions. Before looking at each of those in turn, let’s consider the implications of higher energy prices for inflation. While there would be serious economic implications if the Strait of Hormuz was effectively shut for months or even indefinitely, it is important – for governments in particular – not to fall victim to recency bias, the phenomenon whereby people attribute excessive importance to that which has happened most recently when they analyse current events. As discussed…

Want to continue reading?

Join today and get full access to The Currency and The Wall Street Journal – TWO premium memberships for the price of one.

Subscribe

Cancel at any time.

Are you already a member? .