Transitioning from an era of plenty to an era of shortages

This article by William White was  published on 20 December  in “The Market” a Swiss financial newspaper. It suggests that the global economy faces such a transition and that there will be, as a result, persistent upward pressure on prices and on interest rates. Similar  to suggestions made by Keynes in “How to pay for the war?”, governments must find ways to scale back unnecessary consumption to finance investments, both public and private, that now offer (think environmental) a very high social rate of return. Politically, this will not be easy.

Posted by williamw in Articles, Press

A conversation with a candid central banker

On December 15, William White had a “Deep Dive” discussion with Danielle Martino Booth on Hedgeye TV.  White suggested that central banks had used the wrong analytical framework to guide their monetary policy and that, as a result, the global economy suffered from many sources of instability – not least unexpected inflation. He added that a number of impending, negative supply shocks would worsen inflationary pressures over the medium term and make policy choices still more difficult. The discussion ended by reverting back to flawed analytical frameworks and efforts to make the economic curricula at universities more relevant to real world problems.

Posted by williamw in Interviews

Korean debt crisis is a cautionary tale as era of easy money ends

William White was quoted in a Bloomberg article focused on recent problems in Korea’s financial markets that eventually required forceful intervention by the authorities to restore order. White felt that many other countries might face similar problems as monetary policy tightened after many years of unusual ease which had invited leverage and imprudent behaviour.


Posted by williamw in Press, References

Letter: How policymakers avoid a ‘cascade of tipping points’

A letter from William White was printed in the Financial Times on 2 December 20 2022. White wrote in support of an earlier article by Martin Wolf called “How to think about policy in a polycrisis”.  A number of interacting systems, each essential for human survival and progress, are currently and simultaneously under threat.  Policy solutions that focus on only one system, without thinking about the effects on other systems, could well prove counterproductive.


Posted by williamw in Articles, Press

Escaping the Debt Trap

William White and Joseph Wang (“Fed guy”) were recently interviewed by Jack Farley on Blockworks Macro. Both provided an assessment of the Fed’s recent policy moves and the balance of risks looking forward. White was particularly  concerned about a series of prospective, negative supply side shocks that would worsen all of the policy tradeoffs facing central banks. To complement monetary restraint, he suggested that governments in advanced economies should rely more on reducing consumption through fiscal measures. As well, better procedures to facilitate orderly debt restructuring would be required for an emerging “era of shortages”.

Posted by williamw in Interviews, Press

Central bankers were warned about their failed policies

Alan Dunne of Top Traders Unplugged (TTU) interviewed William White on 21 October 2022. TTU is a long running podcast for investors, with more than 7 million downloads since inception. White spoke about what he perceived to be fundamental shortcomings in past monetary policy in the advanced market economies, and some of the attendant risks going forward. Recent events in the UK gilt edged market  underline the risk that future inflation control could be compromised by financial dominance or fiscal dominance or both. Anticipated negative supply side shocks will aggravate existing policy tensions.

Posted by williamw in Interviews, Press

The Great Reversal into a higher inflation environment

In a Financial Times article written on September 8, John Plender made a favorable reference to the Forward, written by William White, to an essay prepared for the New Zealand Initiative by Graham Wheeler and Bruce Wilkinson. White suggested that central banks have systematically underestimated the importance of supply side shocks when setting monetary policy.

Posted by williamw in Press, References

Edward Chancellor and “The Price of Time”

Edward Chancellor’s recent book “The Price of Time” traces the history of interest rates from their first use in Mesopotamia to modern times. He convincingly documents how low interest rates generally lead to financial instability, low growth and economic insecurity. In the book, and in an interview with Mark Dittli of “The Market” (linked below), he refers very favorably to earlier papers of William White and Claudio Borio of the BIS whom he generously describes as “the heroes in this story” who, in the end, will ” have the last laugh”.

Posted by williamw in Press, References

Structural Reforms Required to Safeguard Democratic Future

William White and Sunil Sharma coauthored an article that was posted by OMFIF on 21 April, 2022. They argue that we could be one serious economic crisis away from significant political turmoil that might threaten our democratic traditions. After decades of slow growth, stagnant real wages, and the many costs of covid, a restless public is increasingly inclined to see political structures as “rigged” and “unfair”.  We must cease relying on macroeconomic stimulus (especially monetary policy) to paper over structural problems, while inadvertently making them worse. Instead,  policymakers should address those structural issues more directly: not least, rising inequality, market concentration, environmental degradation and the need for debt restructuring.

Posted by williamw in Articles, Press