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Fed Easing May Spur Deflation in Europe, Mundell Says

Federal Reserve debt purchases to stimulate the U.S. economy may send the euro rising against the dollar, sparking deflation in Europe, said Nobel Prize-winning economist Robert Mundell.

The European Central Bank would be unlikely to stem the euro’s gains, Mundell said in an interview in Beijing today. In an earlier speech, he said U.S. quantitative easing would hurt nations around the world.