Balance sheets of central banks in advanced economies have ballooned by trillions of dollars since the onset of the Great Recession. Now, U.S. policymakers are beginning to focus on the goal of unwinding the balance sheet. While the arguments for doing so are not convincing, it seems inevitable at this point. That said, there are several things that seem to missing from policymakers’ discussions this far of the unwind of which they must be very cognizant. Continue reading Comments on Exiting the Era of Big Balance Sheets
3 days of the “Europe in Crisis” conference in Madison, WI have come to a close. A fantastic conference with even better speakers—ranging from Gillian Tett of the Financial Times to Chad Bown of the Peterson Institute, and everyone in between. Great insights on Brexit, the euro crisis, populism, and more. I presented on Europe’s safe asset shortage and the mechanisms by which it is hindering the economic recovery. (Slides below.) Thanks to all the attendees, speakers, and conference organizers (European Horizons) for the great conference.
My latest over at The Huffington Post. A wonkish look at the safe asset shortage and the waning efficacy of quantitative easing: http://www.huffingtonpost.com/european-horizons/yes-the-world-does-have-a_b_14636524.html
Weak economic activity, central bank balance sheet risks, and misaligned investor incentives can be alleviated. My latest at the Huffington Post: http://www.huffingtonpost.com/european-horizons/draghi-other-central-bank_b_11968802.html
“The national debt as a share of gross domestic product has more than doubled since 2007, to around 75%, but net interest payments on the debt have actually declined,” Continue reading “All Models Are Wrong, But Some Are Useful”: Safe Asset Shortage Edition
Advanced economy governments have increased financial regulation in the aftermath of the crisis, but haven’t altered their own behavior sufficiently to compensate for greater restrictions—-My latest over at The Huffington Post: http://www.huffingtonpost.com/european-horizons/governments-cant-keep-up-_b_10506148.html