Perry Mehrling's blog

Young Scholars Will Bring New Economic Thinking

Look around and you’ll see that the economic problems facing us today are many. Even worse, the most pressing of these problems pose a daunting challenge even to analyze in their full complexity, let alone solve.

It may seem that implementing any credible solution within current political and economic institutions is at least implausible, if not impossible. So why am I hopeful about the future? Read more

OMT: Slouching toward Eurobills?

The Eurocrisis has many dimensions—bank solvency crisis, sovereign debt crisis, political unity crisis, and economic/unemployment crisis—but time after time it has been the liquidity crisis dimension driving events, and ECB response to the liquidity crisis driving institutional evolution.  The reason is simple.  Liquidity kills you quick. Read more

Ring-fencing Explained

Everyone wants to ring-fence something, but they can’t agree on what:  Vickers, Liikanen, Volcker.

In all proposals, the idea is to have bank capital separately allocated for some activity, and to prevent that capital from being exposed to any other activity.  Some people want to lock the wild animals in a cage to keep them away from us; some people want to lock the tame animals in a cage to keep them safe from the dangerous world outside. Read more

Lethal Embrace? A Thought Experiment

At the heart of the Eurocrisis lies a vicious circle where once there was a virtuous one.  Over the last week or two, the FT has been reflecting on the connection between the sovereign debt crisis and the bank crisis, conjoined twins (as George Soros has put it) of the current Eurocrisis.  See here, here, here.

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Maynard's Revenge: A Review

 

 

Below is a revised version of a talk I gave at the New School University, at a conference to launch Lance Taylor's latest book.  The date of the event was April 28, 2011, more than a year ago, and the delay in revision was entirely my fault--overcommitment and pressing deadlines on many fronts.  Sorry about that. 

Lance Taylor, Maynard’s Revenge:  The Collapse of Free Market Macroeconomics (Harvard 2010). Read more

Insights from Bagehot, for these Trying Times

Here is a talk I gave recently at Wake Forest University.  It is pretty long, but you can page through the video (on the left) by paging through the powerpoint (on the right), and anyway the last twenty minutes are devoted to questions.  I couldn't figure out how to embed it in the blog, but the link will get you there.

The Clash of Economic Ideas: A Review

When Paul Krugman paints John Maynard Keynes as a pioneering critic of dominant free-market economics, he exaggerates wildly, both about the rigidity of orthodoxy and about the pioneering character of Keynes’ critique.  So says Larry White in his book The Clash of Economic Ideas and, speaking as a sometime historian of economic thought, I am inclined to agree.   It's less black and white than Krugman makes it out to be. Read more

Mehrling on Soros

 

The text below is the comment I offered on Mr. Soros' opening speech at INET's Berlin Conference April 12, 2012.  The text of Mr. Soros' own speech is here.  Video of the entire session is below--my bit starts at 55:00.

 

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World Without Money Reconsidered

FT Alphaville has picked up on my friend James Sweeney's latest, and since James cites the latest writings by other friends Zoltan Pozsar, Manmohan Singh, as well as my own most recent, the piece reads like a discussant's comments on a shadow banking symposium. Read more

Eurocrisis Redux

Entangling alliances or entangling leagues are nothing to the entanglements of cash owingKeynes

The recent BIS Quarterly Review article "European Bank Funding and Deleveraging" takes a stab at connecting all the dots in the Eurocrisis.  It is only 12 pages, but with 8 (triple) graphs, there is a lot here to digest.  Let's take a stab. Read more