Recent quotes:

Afternoon Must-Read: Barry Eichengreen: Why Our Success in Managing the 2008 Banking Crisis Was the Mother of Failure - Washington Center for Equitable Growth

My book ends on a pessimistic note… …that our very success in avoiding a repeat of the worst crisis in 80 years means that we are likely to experience another such crisis in considerably less than 80 years. Because we avoided complete collapse of the banking and financial system like that which occurred in the 1930s, the prevailing system was not discredited to the same extent. The opponents of financial reform were able to regroup and mount resistance to more far-reaching regulatory action of a sort that I’m convinced is still necessary to limit risks to financial stability. This is not to argue that we would have been better off letting the banking and financial system collapse in 2008-9. But the irony is that success was also the mother of failure.
#Barry-Eichengreen - equitablegrowth.org

Morning Must-Read: Barry Eichengreen: The Fed Under Fire - Washington Center for Equitable Growth

Barry Eichengreen: The Fed Under Fire: “Fed officials… while they would prefer not to re-litigate… 2008… …their decisions are still not well understood and that officials must do more to explain them…. Fed officials should avoid weighing in on issues that are only obliquely related to monetary policy…. Fed officials should acknowledge that at least some of the critics’ suggestions have merit. For example, eliminating commercial banks’ right to select a majority of each Reserve Bank’s board would be a useful step in the direction of greater openness and diversity. The Federal Reserve System has always been a work in progress. What the US needs now is progress in the right direction.
#Monetary-Policy #Federal-Reserve #Barry-Eichengreen - equitablegrowth.org

Morning Must-Read: Barry Eichengreen: Cassandras and Currency Wars - Washington Center for Equitable Growth

Barry Eichengreen:: Cassandras and Currency Wars: “Economic analysis, it seems… …is the art of recycling old ideas under new names. So it is with the debate over currency wars, which parallels exactly the 1930s debate over competitive currency devaluation. David Woo, meet Ragnar Nurkse. Nurkse, in… 1944… [argued that] competitive devaluation was a negative-sum game. These are exactly the arguments made by today’s Cassandras of currency wars…. Subsequent scholarship shows, however, that the main reason monetary policy didn’t work more powerfully in the 1930s was that it wasn’t tried…. Central banks in the 1930s were reluctant to utilise their newfound monetary freedom… failed to make open-ended commitments to raise prices… effectively transform expectations… supplement the new monetary regime with supportive fiscal action… failed to convince investors that they were committed to a fundamentally new policy regime…. And because they failed to coordinate their monetary and exchange rate policies internationally, haphazard exchange rate changes only created volatility and uncertainty, as argued here. Today, in contrast, central banks like the Bank of Japan and European Central Bank are making open-ended commitments to do what it takes…. Without that action and those steps, however, the Cassandras of currency wars will be right.
#Barry-Eichengreen #Currency-Wars - equitablegrowth.org