Articles

Is the world still at risk of the “Japan disease”?

This question was posed by the editors of The International Economy to a symposium of over thirty analysts, including William White. White responded that the world will likely languish in “an extended low growth funk” unless the problem of ever growing public and private sector debt is adequately addressed. The “headwinds” of debt were already exerting an undesirable influence on the global economy prior to the pandemic, and the policy response (however necessary, short term)  has made this underlying problem worse. White suggests that, absent any credible alternative policies, cooperative agreements between debtors and creditors to restructure debts might be the least costly and least risky solution.

InternationalEconomySpring2020Japanificationpdf

 

Posted by williamw in Articles, Press

How long should lockdown measures to fight covid-19 continue?

This article was published on 22 April 2020 in “The Market” a Swiss digital business paper associated with NZZ. It argues that governments need to clarify the criteria they will use to determine when to relax the current “lockdown”, which is helping to save lives (by taking the pressure off hospitals), but also has enormous economic (lost jobs)  and social costs. “Flattening the curve” by social distancing should be complemented as soon as possible by all the government expenditures (and legislation) needed to allow the hospitals to cope. Then, social distancing, with all its costs, can be relaxed. Much improved antigen and antibody testing will also support earlier relaxation.

https://themarket.ch/meinung/how-long-should-lockdown-measures-to-fight-covid-19-continue-ld.1915

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The recession and the pandemic: cause or trigger?

William White wrote an Intelligence Memo for the C D Howe Institute on 26 March 2020. He notes that the pandemic has certainly caused a recession, hopefully one followed by a “V” shape recovery, but it might also trigger a deeper and more prolonged downturn. In recent decades, global monetary policy has focused too much on short term effects and too little on the longer term consequences – like the continued build up of debt. Macroeconomic policies designed to support the economy in the face of the pandemic should balance off “urgency” with longer run “effectiveness”.

cdhoweIntelligenceMemo
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“Take a thought for the morrow” (Matthew 6:34)

This article was published as an OMFIF Commentary on 23 March. It expresses concern that the recession sparked by the pandemic might turn into something deeper and more long lasting.  While recognizing the associated need for policy to lean urgently against the current slowdown, to support a “V” shaped recovery, White notes that some ways of doing so are more effective than others. Policy choices should also “take a thought for the morrow” so as to avoid unintended longer term consequences.

 

OMFIFCOVID-19.docxPDF
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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.

https://themarket.ch/meinung/why-we-should-worry-about-a-new-global-currency-war-ld.1107

 

Posted by williamw in Articles, Press

New Thinking in Economics

This letter to the editor was published in the April 27th edition of  “The Economist”. It refers briefly to policy insights suggested by embracing the concept of the economy as a complex, adaptive system. A much fuller presentation of those insights, for the conduct of monetary policy in particular, can be found under the category “Presentations” on this website. Posted on 22 April, 2018, the article is entitled “Recognizing the Economy as a Complex, Adaptive System: Implications for Central Banks”.

https://www.economist.com/letters/2019/04/27/letters-to-the-editor

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Global debt risk: Are we prepared for the next crisis?

This article was published on 25 April in a new, on-line  Swiss business journal called “The Market”. It suggests that our collective efforts at “crisis prevention” have not been successful and that future economic and financial crises can by no means  ruled out. Moreover, the effectiveness of the instruments we have available to attenuate such problems (“crisis management”) have seriously diminished over time. In such circumstances, many debts will not be serviced or repaid. To avoid a disorderly outcome, like the Debt/Deflation described by Irving Fisher in 1936, many debts will have to be restructured or forgiven. We should be focusing now on improving our legal and administrative procedures to ensure that these debt problems can be resolved  (“crisis resolution”) in as orderly a way as possible.

https://themarket.ch/meinung/william-r-white-are-we-prepared-for-the-next-financial-crisis-ld.213

 

Posted by williamw in Articles, Press

Ways Out of the Global Debt Trap

This article was published in the Frankfurter Allgemeine Zeitung on 18 December 2018. It was based on a presentation made on 16 November to the Progress Foundation in Zurich.

 

Gastbeitrag Bill White FAZ Dez 2018
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Reforming the Fed

Along with others, Mr White was invited to provide an answer to the question, posed by the magazine The International Economy, of how the Fed’s mandate might be changed. He suggested that efforts to raise inflationary expectations by changing the mandate were doomed to failure. Rather, the Fed should pay less attention to decimal point deviations from inflation targets and focus more intently on avoiding credit driven “busts” in financial markets. The article was published in the Spring 2019 edition.

Reforming the Fed

InternationlEconomyFedReformPublication
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Bad Financial Moon Rising

In this article, published by Project Syndicate, Bill White lays out his reasons for believing that a forthcoming financial crash and subsequent global recession might be even more serious than the one that began in 2008. One important factor is that governments have a much reduced capacity to repond as well as a much reduced willingness to do so in a cooperative way. If rising nationalist tendencies impede collective policy action, which then leads to a worsening economic situation and still more nationalism,  we would be on “an old, familiar, and extremely dangerous path”.

Bad Financial Moon Rising

https://www.project-syndicate.org/commentary/global-economy-weak-fundamentals-by-william-white-2018-10

 

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