Price stability is not sufficient to ensure macroeconomic stability

In an interview in early December 2019, William White suggested that central banks had given too much importance to the pursuit of price stability in recent decades. There are no costs associated with declining prices when the underlying cause is increases in productivity. Moreover, resisting disinflationary pressures with monetary easing, cycle after cycle, leads to a buildup of  debt and other economic imbalances that do more to threaten sustainable growth than to sustain it. Accordingly, more reliance should be put on fiscal policy in the next economic downturn. Indeed, it was a mistake not to have done so earlier.





Posted by williamw in Interviews, Press

Why negative interest rates are not a good idea !

Jonathan Roth, an associate of John Mauldin,  interviewed William White and Grant Williams (a co-founder of Real Vision) on October 9, 2020.  Both agreed, for a whole host of reasons, that negative policy rates were not a good idea. They were unlikely to stimulate aggregate demand as desired, and could have undesirable and unintended side effects.

Posted by williamw in Interviews, Press

Negative Interest Rates Are a Bad Idea

William White was interviewed, along with Grant Williams, by Jonathon Ross of Mauldin Economics. The interview was part of a series entitled the “Seven Deadly Sins” directed to identifying vulnerabilities in the global economy and to shortcomings in the policy responses to these vulnerabilities. This particular interview focuses on the undesirable implications of introducing negative interest rates to stimulate aggregate demand. They will not work as intended and will have unintended consequences.

Posted by williamw in Interviews, Press

Are fears of a global “currency war” justified?

This article was recently published in German and English by “The Market” , a leading online Swiss financial journal. It argues that, in some respects, we have actually been engaged in a kind of currency war for many years. Countries are not actively trying to depreciate against the dollar, but they are actively trying to prevent their currencies from appreciating. Should the Trump administration now respond, be trying unilaterally to lower the value of the dollar, this could result in a decline in faith in the value of all fiat currencies. In short, another battle in the currency war would be a very bad idea.


Posted by williamw in Articles, Press

Financial Fault Lines, Central Banks and the Law of Unintended Consequences

On 26 September, William White was interviewed for a podcast  based in New York city called, “Hidden Forces”. Demietri Kofinas raised questions about the current economic and financial outlook and the extent to which central banks and regulators might have inadvertently contributed to new problems while trying to solve old ones. The discussion also touched upon climate change and the implications this might have for the governance of the financial system.

Posted by williamw in Interviews, Press

Central Banks Need to Rethink their Policy Framework

William White answered a number of questions from Marc Schroers about the current and prospective conduct of global monetary policy. The interview was published on 25 September in Borsen Zeitung. The German version and an English translation are referred to below.




Posted by williamw in Interviews, Press

Bloomberg interview with Amanda Lang

On September 10 William White had an interview with Amanda Lang of BNN. Her questions were primarily about the conduct of monetary policy in the global economy, against the backdrop of rising debt ratios and rising trade tensions. Mr White suggested that fiscal policy might have to be relied upon more heavily in the face of any coming downturn. He concluded the interview by noting that monetary policy in small, open economies like Canada was essentially about coping with the monetary policies being followed by much larger countries, above all the United States.

Posted by williamw in Interviews, Press

China’s renmimbi and the global ring of fire

In a 29 August article in the Financial Times, Paul Hodges and Daniel de Blocq van Scheltinga refer to an earlier interview that William White gave to the Daily Telegraph. The general concern he raised was that a growing level of global debt could trigger or exacerbate another global recession. More particularly, White stated his concern about the growing level of dollar denominated debt, issued by non residents of the United  States. This exposed the issuers to dangerous currency mismatch problems should the US dollar continue to strengthen. The recent depreciation of the renmimbi was worrisome in that regard, particularly if it sparked renewed capital flight from China, as was the possibility of another “Risk Off” phase in international capital flows.


Posted by williamw in Press, References

Why policy makers should embrace complexity economics as their analytical framework

Bill White gave a radio interview on 17 May to Chris Sheridan for the California-based Financial Sense Newshour.  The Financial Sense Newshour is a free financial/market broadcast that features analysis of current market events and interviews with financial experts. While directed in large part to the implications for public policy of embracing the concept of the economy as a complex adaptive system,  the discussion ranged more broadly over issues pertinent to both monetary policy and financial regulation. One important issue raised was an evaluation of Modern Monetary Theory, its near term allure but its longer-term dangers.


Posted by williamw in Interviews, Press

How the long debt cycle might end

Martin Wolf, in his article of 14 May, 2019 in the Financial Times, made reference to some of my earlier publications that warned of a renewed financial crisis. He notes my concerns about a constantly growing ratio of non-financial sector debt to global GDP and the incoherence between the near term implications of monetary policy (expansionary) and financial regulation (contractionary) for aggregate demand. These problems, along with many other “imbalances” in the global economy arising from policy actions, might trigger a renewed crisis. Should exogenous forces, like a trade war, provide an alternative trigger for a new downturn, these “imbalances” will surely worsen it s magnitude and duration.

Posted by williamw in Press, References