OECD (NAEC) Panel on “The financial system”.

The NAEC (New Approaches to Economic Challenges) group at the OECD organized a panel discussion on the occasion of the publication of a book called “The financial system”. The panel was chaired by Rana Foroofar, Associate Editor of the Financial Times, who concluded by saying that the NAEC group “is doing possibly the most important conversation building in the world on these topics”. William White discussed his chapter in the NAEC book, in particular the practical lessons for policy makers from embracing the concept of the economy as a complex, adaptive system.


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Creating resilient futures: climate, COVID and the economy

William White contributed to a panel on 23 September that was organized by the Balsillie School of International Affairs in Waterloo, Canada. Other panelists were Diana Fox Carney, a climate and policy expert, and John Hancock, a Senior Adviser to the General Director of the WTO. They exchanged views on the character of a sustainable global economy, on the changes required to achieve such a state of affairs, and the various impediments to doing so. It seemed generally agreed that  unpalatable  (ie costly and risky) policy solutions will now be required if we are to avoid disastrous outcomes.  White finished by suggesting that politicians’ biggest challenge will be to convince ordinary citizens, as well as the rich and powerful, that these needed policy changes are actually are in their own best interests.


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A global asset price bubble in a weak global economy

On September 21, Alex J. Pollock welcomed on behalf of the American Enterprise Institute,Tobias Adrian, Jeffrey Frankel, Desmond Lachman, and William White for a follow-up conversation to their April discussion on the developing disconnect between asset prices and economic fundamentals.  White described the undesirable consequences of past monetary policy by outlining the trend of falling interest rates, accumulating debt, and declining debt quality. He suggested that policy makers have made two grave errors. They did not  appreciate the risks of debt accumulation, financial market distortions and resource misallocations stimulated by repeated cycles of monetary easing. Moreover, they had eased monetary policy inappropriately in the face of positive supply side shocks, largely in the years leading up to the Great Financial Crisis.  We are now in a “debt trap”, worsened by the pandemic,  from which it will be hard to escape.

Links to the conversation and White’s background notes are found below.



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Five considerations for a sustainable recovery

On 16 September, William White participated in a webinar panel chaired by John Orchard, the CEO of OMFIF. Other panelists were Robert Holzmann, the Governor of the Austrian National Bank, Pierre Siklos of the Balsillie School of International Affairs (BSIA) in Waterloo, and Danae  Kyriakopoulou, Chief Economist at OMFIF. The discussion was motivated by a paper, written by William White, and published on the same date by both OMFIF and the BSIA.



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Beyond the lockdown: Monetary policy and financial stability in the transition

William White gave a webinar on 9 June 2020 for the Global Risk Institute. He began by explaining how the global economy developed a number of “dangerous preconditions” prior to the onset of the covid 19 pandemic. In particular, global debt ratios had swelled to unprecedented levels under the influence of extremely accomodative monetary conditions.  The fiscal and monetary response to the pandemic, in the advanced market economies, will further increase debt ratios with implications for both financial stability and inflation. Mr White noted that, unfortunately,  these macroeconomic challenges will be accompanied by other challenges as well. It is clear that current trends with respect to wealth  distribution and environmental damage are not sustainable. While solutions can be proposed for all of these challenges, they will be costly and there will be political resistance. People must be convinced that solutions that are “unpalatable” are preferable to outcomes that are “disastrous”. The need for debt restructuring needs particular attention.

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Coronavirus and the bursting of the everything bubble

On 22 April, William White participated in a panel organized by the American Enterprise Institute in Washington. Other participants were Tobias Adrian (IMF), Jeffrey Frankel (Harvard University) and Desmond Lachman (AEI).  In addition to responding to various questions posed by the moderator, Alex Pollock, Mr. White led a discussion on how debt accumulation increases the exposure of the economy to exogenous shocks – like the coronavirus. While the current response of  monetary and fiscal stimulus is appropriate, both policies serve to raise debt levels even further. Significantly more attention needs to be paid to judicial and administrative procedures for restructuring debt, both private and public, in order to avoid more disorderly and costly outcomes.



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Economic globalisation and the need for international cooperation

This presentation by William White was made in 2012, but has only recently been written up. The presentation began by noting the good and bad aspects of economic globalization, and the challenges it posed for policymakers. It then went on to discuss why international cooperation was required to meet those challenges, and to identify the various factors that were likely to impede that cooperation. Some eight years later, most of the reflections in the paper seem as pertinent as ever. Indeed, in light of the Covid-19 crisis, perhaps even more so.












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The effects of ultra low interest rates on banks and the economy

On 13 December, William White made a presentation on this topic in the final panel of a two day conference at Imperial College Business School in London UK.  Other panelists were Jose Manuel Campa, Nicholas Veron and Martin Wolf. Mr White spoke first about the effects of ultra low rates, both desired (generally ineffective) and undesired (generally unintended) and then about negative rates. The distinction reflects the possibility that there could be a “phase shift” at the Zero Lower Bound. He concluded by talking about alternatives to ultra low rates, and stressed the need for efficient processes to facilitate the orderly restructuring of debt loads that have grown very heavy.




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Tools for the Next Global Recession?

On December 10, 2019, William White participated in a luncheon panel addressing this question at the C D Howe Institute in Toronto. Other panel members were Dawn Desjardins, Deputy Chief economist of the Royal Bank of Canada, and Mark Zelmer, former Deputy Superintendent of Financial Institutions at OSFI. Mr. White began the discussion with an overview of global developments. He concluded that growing stresses in the global economy, not least rising debt levels, could trigger a recession but would certainly aggravate one arising from other causes. Since our macro instruments to respond were now much constrained, serious thought should be given by governments as to how orderly debt restructuring might be facilitated.



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Emerging Market Debt Risk: Are We Ready for the Next Crisis?

On November 18, 2019, William White made the introductory presentation for a three day conference sponsored by UNCTAD in Geneva, Switzerland. He focused on how ultra easy monetary in the advanced market economies had led to capital inflows into emerging markets (a “boom”) and increased their vulnerability to a subsequent outflow (a “bust”). Inadequate domestic policies and changes in the sources of funding (not least corporate issues of dollar denominated bonds) have increased both the likelihood of a forthcoming crisis and its possible severity. The policies needed to help prevent such a crisis, to manage such a crisis and to help resolve such a crisis (orderly restructuring and forgiveness) remain highly inadequate.

UNCTADGeneva2019 [Autosaved]

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