Eichengreen, Barry, (2016), “Financial Scarcity Amid Plenty”, Project Syndicate, 14 June
With interest rates at all-time lows and central banks buying everything that moves, the world is awash with credit. Yet, paradoxically, a dangerous shortage of international liquidity is putting the global economy at risk. “International liquidity” refers to high-quality assets accepted around the world for paying import bills and servicing foreign debts. These are the same assets that central banks use when intervening in foreign-exchange markets. They serve as reliable stores of value for international investors. They provide pricing benchmarks in financial markets. And they are widely accepted as collateral for cross-border loans.
Relevant Posts
- Frieden, Jeffry, (2016), “Lessons for the euro from early US monetary and financial history”, Bruegel Essay, 25 Μay
- Shiller, Robert J., (2016), “Fighting the Next Global Financial Crisis”, Project Syndicate, 18 Μay