New Delhi, April 1 -- The financial and economic implications of the US-Israeli war with Iran will depend on the war's duration. The longer it goes on, the longer we can expect oil, gas, fertilizer, helium and other prices to remain elevated. The greater the damage done to the Gulf's oil production and export facilities, the greater the stagflationary pressure, which will have a major impact on global equity markets, bond yields and credit spreads.

The economic damage from higher inflation and lower growth would be most severe in Asia, which is suffering both an energy-price and -quantity shock. Europe is facing negative terms-of-trade pressure and serious inflation risks, but its energy-supply shock will be more limited than Asia's.

Th...