Monday, 4 November 2013
The debate that has raged over monetary and fiscal policy for the last several years has restored the issue of stabilization policy — once a standard element of graduate work, but increasingly pushed to the margins in recent decades — to the consciousness, if not the practice, of macroeconomics. It also has me thinking about the last time there was a similar crisis in macroeconomic policy. That earlier episode was the stagflationary 1970s; it too was a period of considerable uncertainty — Galbraith's Age of Uncertainty from which this blog's title is derived.
Friday, 1 November 2013
In this lecture, CIGI Senior Fellow Paul Blustein discussed his latest book, Off Balance - a detailed account of the failings of international institutions in the global financial crisis that erupted in 2008.
Wednesday, 30 October 2013
A previous post discussed a new report on sovereign bankruptcy prepared by the Committee on International Policy and Reform and published by Brookings. The report discusses the potential role of debt thresholds, working in concert with the IMF at the global level, or the European Stability Mechanism at the European level, in creating incentives to limit the accumulation of debt, ex ante, and in facilitating timely, orderly restructuring, ex post.
Monday, 28 October 2013
The Financial Times has an article, concerning Bank of England (BoE) Governor Mark Carney's policy of forward guidance. The article raises concerns that the policy could lead households and businesses to believe that current interest rate levels are "guaranteed." The danger, it suggests, is that the forward guidance policy increases the risk of distorting investment and sows the seeds of a future crisis (asset price bubbles).
Tuesday, 22 October 2013
In the past few days, opposing views of Alan Greenspan have emerged from two economists of some considerable renown. Writing in the Financial Times, here, Larry Summers reviews Greenspan’s new book. Summers’ review is balanced; in it, he notes his disappointment that “the events of the past few years had not led Greenspan to any revision of his anti-Keynesian views on macroeconomic policy.”
Award-winning author to detail ‘lamentable deficiencies’ of international financial institutions, in CIGI lecture
Monday, 21 October 2013
Award-winning author and journalist Paul Blustein will detail the “lamentable deficiencies” in the institutions tasked with addressing the challenges of the post-crisis global economy, when he delivers the next CIGI Signature Lecture
Saturday, 19 October 2013
The Eurozone’s tangle of conflicting goals – a series of ‘trilemmas’ – is not without precedent. This column argues that it is reminiscent of the interwar situation. The interwar slump was so intractable not just due to financial issues, but also a crisis of democracy, of social stability, and of the international political system. The big difference in the EZ is that nations cannot go off the euro as they went off the gold standard. That is why the initial EZ crisis may not have been so acute as some of the gold standard sudden stops, but the recovery or bounce back is painfully slow and protracted.
Friday, 18 October 2013
Don't play the game of chicken on a bridge; especially when you are facing down a freight train fully loaded with iron ore. That is the conclusion to be drawn from the Congressional "time out" called in the game of brinkmanship over the U.S. debt ceiling.
Thursday, 17 October 2013
The previous post, here, highlights the uncertainty induced by ongoing litigation over the restructuring of Argentine debt that occurred a decade ago. A ruling by the Second Circuit Court of New York could, in effect, recast the rules of the game by which successful sovereign debt restructurings have been conducted since the Argentine default.
Tuesday, 15 October 2013
As the game of brinkmanship over the U.S. debt ceiling enters the final period, there is optimism that a short-term fix is possible. Although financial markets have remained remarkably composed, as the game clock runs down further without a resolution, look for greater volatility.