Macroeconomics

In a Bloomberg Markets Most Influential Summit Debate, Institute board chairman Adair Turner explains why extraordinary monetary policy isn’t working

While many countries throughout the world have faced severe financial crises over the last decades, and while the Japanese stagnation and the 1997 Asian financial crisis did induce some additional interest for the introduction of banking and finance in macroeconomic theory, it is only with the advent of the US subprime financial crisis that macroeconomic and monetary theories put forward by mainstream economists have started to be questioned.

An exclusive conversation with Richard Batley, Head of Macroeconomics at Lombard Street Research.

We know about emergency lending, but what we are missing is the macroeconomic framework to guide a new rule for stabilization policy

Like any family reunion, the Jackson Hole Economic Symposium may have been as significant for what was said as it was for what was not discussed

Is Market Capitalism simply an accident of certain factors that came together in the 19th and 20th centuries? Does the innovation of economics require a new economics of innovation? Is the study of economics deeply affected by the incentive structures faced by economists themselves, necessitating a study of the “economics of economics”?

The Economist pays tribute to Hyman Minsky, whose ideas on financial instability have not been given the attention and prominence they deserve

This paper responds to a paper by Claudio Borio, Piti Disyatat and Anna Zabai “Helicopter Money: the Illusion of a Free Lunch”

Focusing on what money really is – whether gold or state fiat – shifts attention away from what credit really is, which is to say away from the center of discontent.

The deadline for submission of paper proposals and complete sessions for the 20th FMM conference is approaching: 30 June 2016. Proposals (extended abstracts, max. 400 words) have to be submitted electronically via this web application. Please find more information in the Call for Papers.

What we’re reading: Recent statements from the IMF and the OECD highlight a growing call for new economic policy thinking in response to the specter of long-term stagnation

Book review: Michel De Vroey and the problems of macroeconomics

What we’re reading: A weekly scan of published items relevant to the Institute’s work

Eight years after the 2008 crisis the global economy is still stuck with low growth, too low inflation, and rising debt burdens. Massive monetary stimulus has failed to generate adequate demand, and some commentators suggest that we are “out of ammunition” with which to counter deflationary pressures.

If the government/CB together finance an increased fiscal deficit with permanent non-interest-bearing fiat money, then some private sector agents have to hold non-interest-bearing monetary base, and must continue to do so even when policy and market interest rates have moved away from the ZLB. How is this possible in an environment where most bank deposit money is potentially interest-bearing?