Tag Archives: global financial system
Debating the nature of money
At the conclusion of a recent star-studded IMF conference, chief economist Olivier Blanchard argued that we may need negative real interest rates for a long time. Here is the passage in full: “Now let me now turn to monetary policy, and touch on three issues: the implications of the liquidity trap, the provision of liquidity,…
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The financial crisis was good for some
All the chest-beating about the financial crisis distracts attention from the fact that many parties gained from it. Governments – except for a few peripheral countries – obtained cheap financing. The US benefiited from a boost to international demand for the dollar, helping to put the euro in its place, just as a previous wave…
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My take on Mr Carney
I have written elsewhere about Mr Carney’s first 5 months (subscription) at the Bank of England. I showed that in terms of the goals he was set by the UK Treasury (both those stated and those unstated but implicit in his appointment), he has made remarkable progress – with luck playing a part. The UK economy has…
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1. In the Trap
To mark publication of the “bigger and better” 360-page paperback (at £16.99 from Amazon, with a new 38-page preface) this and the following posts list the book’s main themes, by Chapter, each with an update. Seen from November 2013, how have recent developments changed the analysis and/or policy prescription? Currrent Economic Outlook Although the short…
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IV The Power of Global Finance
Under present arrangements, finance too often acts as a malevolent force, rewarding private sectional interests at the expense of the public interest. This is because the globalisation of markets has run ahead of our power to control them. Properly harnessed, global finance could be, again, an enormously powerful force for good. Designing such a harness…
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Are the political conditions for reform out of reach?
Three major failures contributed to the global financial car crash • There was a failure of banking and bankers – imprudence and irresponsibility, tinged with instances of criminal behaviour, insider trading, mis-selling, deceit and fraud; • There was a failure of central bankers – they were seduced into assuming the self-stabilising properties of markets,…
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Where have all the safe assets gone?
While it has already become a cliché to say that there is no such thing as a risk-free asset, policy makers and market participants are only just beginning to recognise what a major shift this is. If we are to get back to anything like the traaditional financial system, renewing the supply of such…
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Sleeepwalking to destruction
I do not suppose that central bankers like to be compared to witches, but for my money the best account of how the financial crisis came about is in Macbeth. Banquo warns Macbeth to be wary of the witches’ implied promises: And oftentimes, to win us to our harm, The instruments of darkness tell us…
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Fred Bergsten calls for monetary reform
Fred Bergsten of the Peterson Institute is the “enfant terrible” of US international monetary and economic debate. Fending off the passing years, it is a role he has played with great panache for the best part of half a century. Always at the centre of things, always provocative, frequently infuriating, he has, as head of the…
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How central banks undermine the market economy
The risks and dangers for the global economy are like hidden reefs for a ship – invisible but deadly. It is quite possible, for example, that expansionary US monetary policy can cause an asset boom in China so large that its collapse would bring the Chinese economy down with it – and thus throw the…
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