What follows is a Foreword I wrote for the Japanese translation of New Lombard Street, coming out later this year: The Global Financial Crisis (GFC) of 2007-2009 served as the first real stress test of the global financial system we had been building over the preceding decades. I refer here to the market-based credit system […]
April 3, 2020 AC is of course After-Coronavirus, and we need to distinguish short run from long run. In the short run, the most important thing to keep in mind is the highly differentiated impact of the crisis, both health and economic. The virus has hit different countries at different times, so recovery will not […]
March 26, 2020 If your cash inflows disappear but your cash outflows remain, what do you do? Dash for cash. Sell what you can for what you can, max out your contractual credit lines, and hold the proceeds in spendable form. The idea is to buy time by finding a way to continue to meet […]
Much has changed in the institutional organization of money markets since Fall 2012 when INET filmed my course “Economics of Money and Banking”, but what strikes me most is how well the fundamental analytical structure has held up. The two ideas that I identify as central to the “money view”—the importance of the daily settlement […]
The following was inspired by my attendance at a recent conference, Money as a Democratic Medium, where I gave a short talk. The “Money View”, as regular readers of this blog will know, is my attempt to systematize a way of thinking that has a long history among practitioners, especially central bankers, but that has […]
The following is in blog form the substance of a talk I gave Sept 7 at a Mercatus conference, “Monetary Policy Rules for a Post-Crisis World.” “Rules versus discretion” is a hardy perennial of monetary policy debate, dating from earliest debates between Bullionists and anti-Bullionists, to the 19th century Currency School versus Banking School, up […]
You can title your conference whatever you want, but the actual content will depend on the speaker list. The convenors of the Jackson Hole Economic Symposium apparently hoped to generate discussion about “Designing Resilient Monetary Policy Frameworks for the Future”. Having read all the papers, I can report that only one of them really engages […]
“I wouldn’t start from here,” the BIS never says explicitly in its recent Annual Report, but nevertheless it goes on to paint a rather comprehensive and compelling picture of a possible future toward which they think we should be trying to head, and of the present dysfunctional economic policies that are daily making it harder […]
Today global money is largely private credit money, the issue of a profit-seeking bank that promises ultimate payment in public money which is the issue of some state, quite possibly a different state from the one where the bank is chartered and does its business. Global money is also largely dollar-denominated, even when the ultimate […]
Peter Conti-Brown, The Power and Independence of the Federal Reserve (Princeton 2016) A powerful meme has taken possession of popular, and even professional, understanding of the role of the Fed. To wit, political forces (specifically the US President) are supposedly always pushing for excessive expansion, and the role of the Fed (specifically the Fed Chair) […]