Monetary Policy

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Stop the presses! Uncertainty is harmful to your economy!

Friday, 6 December 2013
blog
Ok, so I may be hyper sensitive to this stuff, but is seems to me that, over the past six months or so, increasing attention has focused on the pernicious effects of uncertainty on global economic prospects. To be sure, this isn't entirely surprising given the game of chicken played out at the edge of the U.S. fiscal cliff just a couple of months ago and the threat of deflation that looms menacingly over the euro zone. But still, the notion that there is an unusual degree of uncertainty has seemingly gained traction; that — dare I say it — we live in a New Age of Uncertainty.

IMF Shifts Its Approach to Bailouts

Tuesday, 26 November 2013
article
Landon Thomas Jr.
“The (IMF) has been bruised and abused. But in the end there is no trade-off between austerity and debt restructuring — you have to do both,” says Senior Fellow Susan Schadler, citing conclusions from her recent CIGI paper.

Inside the Issues 4.9 | Five Years After the Financial Crisis

Wednesday, 20 November 2013
video
In analyzing the financial crisis five years down the road, CIGI Research Fellow David Kempthorne notes that "the line between legality and morality [was] one of the key issues." This week, co-host David Welch chats with Kempthorne on key structural failures that lead to the 2008 financial crisis and the subsequent reaction from the international financial regulatory system.

Challenges of the International Monetary System and Response Options: A South African Perspective

Wednesday, 20 November 2013
publication
Johan van den Heever
The focus in this paper is on the international reserve currency dispensation that could best serve the world. In particular, aspects of South Africa’s experience with exchange rate reform, currency internationalization and monetary integration are highlighted in an attempt to extract elements that may be of relevance to reform the international monetary system.

Development and Finance

Wednesday, 20 November 2013
blog
Adam Smith said it best: in his magisterial work, the Wealth of Nations, he argued that governments have an essential role to play in enforcing contracts and promoting institutions to promote the quientessential Canadian virtues of "peace, order and good government."

A tale of two crises

Monday, 4 November 2013
blog
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.

Off Balance: International Institutions and the Global Financial Crisis

Friday, 1 November 2013
video
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.

Still missing after all these years

Wednesday, 30 October 2013
blog
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.

Guidance in an Age of Uncertainty

Monday, 28 October 2013
blog
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).

Alan Greenspan: Technician or Engineer?

Tuesday, 22 October 2013
blog
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.”