Articles

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

Posted by williamw in Articles, Press

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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A Global Dollar Shortage?

The editor of The International Economy magazine asked a number of well known economists “What to make of the global dollar shortage?” The answers were published in the Summer 2018 edition. Bill White’s contribution emphasized systemic exposures linked to the major increase in dollar denominated liabilities issued (largely by corporations) by entities whose revenues were not generated in dollars. Should we pass through another phase of “Risk Off” investing, liquidity support in dollars from the Federal Reserve would likely be required. Whereas swap lines exist for European and some other central banks, no such lines currently exist for some emerging market economies likely to be on the firing line in the future.

International EconomySummer2018

 

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Are We at Risk of a Global Straightjacket?

This article was published in the spring 2017 edition of “The International Economy”.

It is argued that global non-financial debt levels (public plus private)are now so high they constitute a kind of “debt trap” for monetary policy. Interest rates must be raised to prevent debt levels from rising further, but cannot be raised without triggering another crisis that we all wish to avoid. It is imperative to take measures to prevent a disorderly restructuring or repudiation of debts that can not be serviced at higher interest rates.

InternationalEconomyDebtTrap
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The Dangerous Delusion of Price Stability

This article was published by Project Syndicate on 14 December 2017.  Making near term price stability the objective of monetary policy is dangerous because of the unintended consequences of pursuing it, and it is delusional because it often (given supply side shocks) should not be pursued in the first place.

https://www.project-syndicate.org/commentary/central-banks-low-inflation-agenda-by-william-white-2017-12

Posted by williamw in Articles, Press