The World Bank published a report today in The Financial Times, saying that rapid interest rate increases aimed at surrounding inflation in product and asset prices, could give way to another recession in US and European countries, as their economies are recovering quite slowly.
The World Bank President, Robert Zoellick, said in the report that waiting for bubbles to burst and then cleaning up the aftermath is now a new lesson of what not to do.
According to him, the interest rates, tightened too much could lead to another downturn, especially in the case of countries that are showing weak recovery signs.
