How central bank mistakes after 2019 led to inflation

William White wrote the Forward for a New Zealand Initiative publication, authored by Graeme Wheeler and Bryce Wilkinson and , in which they contend that expansionary central bank policies contributed significantly to the global inflationary pressures which have emerged in recent years. In his Forward, White agrees that the analytical framework used by many central banks is fundamentally flawed. Not least, central banks have for decades underestimated the importance of recurrent shifts in the supply capacity of the global economy.


Posted by williamw in Publications

Edward Chancellor and “The Price of Time”

Edward Chancellor’s recent book “The Price of Time” traces the history of interest rates from their first use in Mesopotamia to modern times. He convincingly documents how low interest rates generally lead to financial instability, low growth and economic insecurity. In the book, and in an interview with Mark Dittli of “The Market” (linked below), he refers very favorably to earlier papers of William White and Claudio Borio of the BIS whom he generously describes as “the heroes in this story” who, in the end, will ” have the last laugh”.

Posted by williamw in Press, References

Negative Supply Shocks: Can our Fragile Democracies Take the Hit?

William White made a presentation on  May 3 at the Institute for International Economic Policy at George Washington University in Washington DC. He contended that the global economic and financial system has been showing increasing signs of stress for many years, raising the likelihood of harmful “tipping points”. In large part, this has been due to the unintended consequences of well-meaning macroeconomic and regulatory policies. Now we must also confront negative supply shocks that will lower real growth and exacerbate inflationary tendencies over a number of years. Unfortunately, over recent years, many democratic countries have also developed political “fault lines” that could now threaten the future of democracy itself. Since history provides many examples of political regime change –  triggered by environmental crises, pandemics, and above all economic and financial crises – there are legitimate reasons for concern.




Posted by williamw in Presentations

Structural Reforms Required to Safeguard Democratic Future

William White and Sunil Sharma coauthored an article that was posted by OMFIF on 21 April, 2022. They argue that we could be one serious economic crisis away from significant political turmoil that might threaten our democratic traditions. After decades of slow growth, stagnant real wages, and the many costs of covid, a restless public is increasingly inclined to see political structures as “rigged” and “unfair”.  We must cease relying on macroeconomic stimulus (especially monetary policy) to paper over structural problems, while inadvertently making them worse. Instead,  policymakers should address those structural issues more directly: not least, rising inequality, market concentration, environmental degradation and the need for debt restructuring.

Posted by williamw in Articles, Press

Liquidity Tidal Wave

William White, along with others, answered a question posed by the editors of The International Economy for their Winter 2022 edition: “To what extent is today’s massive global ocean of liquidity breaking all the rules in US financial markets?” White suggests (page 10) that nominal bond rates have stayed low, in part, because the Fed has convinced the bond markets that real rates are “naturally” low, and that higher inflation is only transitory. Should either of these arguments be contested, and White notes there are good grounds to believe they might be, then nominal rates might rise sharply. In this case, ” the effects on an overleveraged global economy would not be pretty”.

Posted by williamw in Articles, Press

The Weaponisation of Finance and the Future of the International Monetary System

On 20 April, 2022, William White and Barry Eichengreen discussed this topic on a webinar organized by the C D Howe Institute in Toronto, Canada.  William White suggested there are many indictors that a global economic and financial crisis could be coming quite soon. He also suggested that such a development, unlike the early days of the crisis that began in 2008, might be more likely to spark a dollar crisis as well. Absent such a dollar crisis, the current international monetary (non) system based primarily on the dollar was likely to continue, though a gradual shift to a tripartite block of national currencies (the dollar, euro and renmimbi) could also be envisaged.  Should a dollar crisis erupt, a variety of outcomes could be anticipated. At one end of the spectrum would be a cooperatively agreed new system, based on some internationally issued money or commodity, that would rectify shortcomings in the current system. At the other end of the spectrum would be an autarchic outcome that would have severe economic, political and even environmental implications.

To see the recording of William White’s presentation use the password Finance123


Posted by williamw in Presentations

Unchartered Waters: When Economic Policy Solutions Become the Problem

William White made a webinar presentation to the Global Risk Institute in Toronto on 3 March 2022. He described how the longer rum implications of policies, above all monetary policy, intended to mitigate shorter run problems  in the economy could cause even worse problems over time. This reality is attested to by numerous signs of stress in the current economic and financial system which could now easily spread over to other systems (political, environmental and public health) as well. White listed seven reasons for expecting a stagflationary future, with equally plausible arguments for subsequent high inflation or a debt-deflation. He raised the possibility that highly indebted governments, given such difficult circumstances, might turn to “financial repression” as the easiest way out.

Posted by williamw in Presentations

Time for a Total Reset? Spillover Problems in Complex Systems,

On 26 February, 2022, William White made a webinar presentation to the Oxford Forum for International Development at Oxford University. He emphasized that the pursuit of sustainable and inclusive growth in free societies rests on the efficient functioning of underlying systems; in particular our economic/financial, political, environmental and public health systems. Unfortunately each of those systems is currently under stress and those stresses seem likely to grow with time. To get off the current “bad path”, White argued we need clarity about what achievable, alternative systems might look like and the practical steps needed to get “there” from “here”.


Posted by williamw in Presentations

The unintended consequences of easy money

Jack Farley of Blockworks posted an interview with William White on 18 November. The interview focused on issues raised in a more technical paper White recently had posted on the INET website (see Publications). Ultra easy monetary policy is increasingly ineffective in stimulating aggregate demand and its negative side effects are becoming increasingly apparent. The discussion also touched upon the distributional implications of the current stance of monetary policy, and the likelihood that “financial repression” might be a solution to the current overhang of debt that has been generated by monetary policy.

Posted by williamw in Interviews