Reinhart, Carmen, (2016), “The Perils of Debt Complacency”, Project Syndicate, 28 Σεπτεμβρίου “What a government spends the public pays for. There is no such thing as an uncovered deficit.” So said John Maynard Keynes in A Tract on Monetary Reform. But Robert Skidelsky, the author of a magisterial three-volume biography of Keynes, disagrees. In a recent commentary entitled “The Scarecrow of National Debt,” Skidelsky offered a rather patronizing narrative, in a …Read More

Tucker, Paul, (2016), “The objectives of financial stability policy”, VoxEU, 28 Σεπτεμβρίου The objective of financial stability policy is unclear. Is it the resilience of the financial system, avoiding the costs of systemic collapse, or managing the credit cycle, containing the costs of resource misallocation and over-indebtedness? This column argues that the answers have serious implications for what can decently be delegated to independent ‘macroprudential authorities’, but have barely been debated …Read More

Sinn, Hans-Werner, (2016), “Secular Stagnation or Self-Inflicted Malaise?”, Project Syndicate, 27 Σεπτεμβρίου Almost exactly eight years ago, the Lehman Brothers collapse plunged the global economy into recession. The interbank market collapsed, and the entire industrialized world was thrown into the worst crisis since the end of World War II. Though central banks have maintained ultra-low interest rates, the crisis hasn’t yet been fully overcome. On the contrary, numerous economies, such as …Read More

Borio, Claudio, McCauley, Robert, McGuire, Patrick, Sushko, Vladyslav, (2016), “Bye-bye covered interest parity”, VoxEU, 28 Σεπτεμβρίου Covered interest parity is close to a physical law in international finance, yet it has been consistently violated since the Global Crisis. Violations since 2014, once banks had strengthened their balance sheets and regained easy access to funding, are especially puzzling. This column argues that the violation reflects a combination of foreign exchange hedging demand …Read More