TOKYO -- The trade war between the U.S. and China risks substantially disrupting the international financial system, Princeton University economist Nobuhiro Kiyotaki says, cautioning that the repercussions of tariff-induced inflation would ripple through the currency and equities markets.
The impact "may spread to the financial system," Kiyotaki told Nikkei in an interview. If both sides continue with tit-for-tat tariffs, "the inflation would lead to further increases in interest rates and give rise to disturbances in the currency market and a stock market slump," he argued.
