William White participated in a webinar panel organized by the American Enterprise Institute on 18 January 2023. White began his remarks with a long list of reasons to be concerned about financial instability. He then went on to note that, absent an “immaculate disinflation”, there might well be the need for more restrictive macroeconomic policy than is currently envisaged. With further monetary tightening likely to be constrained by fears of  private financial instability, as well as fears of government debt service becoming unsustainable, fiscal restraint had to be considered more seriously. Absent the political will to do so, “financial repression” might be turned to as an easier alternative.

https://www.aei.org/events/soft-economic-landing-or-financial-market-crisis/

William White presented a webinar to the Global Risk Institute in Toronto on 24 January, 2023. He contended that the global economy will face a number of negative supply shocks in the years ahead, while at the same time facing the need for a significant increase in investment. This will create pressure for higher inflation and for higher real interest rates. However, as a legacy of past debt accumulation, higher rates could create financial instability and also fears about the sustainability of government finance in many countries. To avoid this dilemma, the best solution would comprise orderly debt restructurings, fiscal restraint and measures to temper consumption. Given the political difficulties of doing this, the more likely solution might be an attempt to reimpose the “financial repression” used successfully to reduce debt overhang after World War ll.

https://www.youtube.com/watch?v=mU2f74il59c

William White contributed to the opening panel of the 25th Central Bank Macroeconomic Modelling Workshop, which took place from 9-11 November. In his remarks, White said he would evaluate recent developments in modelling from a particular perspective: namely, that economies were complex, adaptive systems with associated properties. From this perspective, he concluded that many recent developments (recognition of uncertainty and non-linearities, more reliance on scenarios than forecasts etc.) would improve the conduct of monetary policy. In contrast, White identified some neglected areas (supply side developments, the possibility of financial instability etc.) that needed to be more closely integrated into models and the monetary policy framework. His written notes and the recording are available below