Publications

On November 18, the Canadian International Council (CIC) posted on  their website a paper prepared earlier by William White for the Council for Economic Policies, a think tank in Zurich. White had made a presentation in July, based in large part on that paper, to a joint meeting of the CIC and the Konrad Adenauer Stiftung. His notes for that meeting are also attached below.

https://thecic.org/if-something-cannot-go-on-forever-it-will-stop/

At the end of March, the Council on Economic Policies (a Zurich based think tank) posted this piece written by William White. White identifies the many challenges, actual and emerging, threatening the future of our democratic, market based systems and indeed of mankind itself. Our economic, political, environmental and health systems are all showing increased signs of stress and any one of them might “stop”. Since all of these systems are interrelated, problems that emerge in one system will threaten the other systems as well. White describes the key characteristics of more sustainable systems, and suggests policies that might be required to move from the unsustainable path we are on currently to a path that would actually leads us to where we want to go.

A book with this title, edited by Per Nymand-Andersen and published by Risk Books, became available on 23 March. William White wrote an endorsement, praising the book for its comprehensive approach to the subject (20 chapters written by authors with different specialities) and its willingness to address both the opportunities and the practical challenges offered by new techniques for data collection and  analysis.

On 17 March, INET published on its website a blog note (summary) and  Working Paper by William White. The Working Paper argues that, by encouraging the issue of debt, often for unproductive purposes, monetary stimulus becomes increasingly ineffective with time. Worse, it has a number of side effects that become increasingly burdensome over time. It threatens financial instability in a number of ways, leads to real resource misallocations that lower potential growth, and finally produces a policy “debt trap” that cannot be escaped without significant economic costs.

https://www.ineteconomics.org/perspectives/blog/the-full-case-against-ultra-low-and-negative-interest-rates

https://www.ineteconomics.org/research/research-papers/its-worse-than-reverse-the-full-case-against-ultra-low-and-negative-interest-rates

Previously a Working paper posted by INET, this article has now been published as a chapter in a book called “The next money crash and a reconstruction blueprint”. Edited by Uli Kortsch, the book makes the case that economic systems in which private banks (and shadow banks) effectively create money are inherently prone to crises of increasing seriousness. It effectively argues for a modern version of the Chicago Plan that replaces bank-created-money with sovereign-created-money. White’s paper helps document many of the problems generated by the current system and why monetary and regulatory policies have not been able to overcome them. He also lists a number of reforms, in order of their ease of implementation, that could in principle reduce the need for more radical reform. White finishes by noting that monetary reform at the national level is not enough. We also need to reform the International Monetary (Non) System.

In this article, published in the Winter edition of “The International Economy” magazine, William White identifies four interrelated and systemic problems, akin to the biblical Four Horsemen, that need urgent and simultaneous attention.  Our economic, political, environmental and health systems are all operating under severe stress. Moreover, their interrelatedness implies that failure anywhere could well lead to failure elsewhere, and potentially everywhere. Where we are is not a good place to be. Recognizing the analytical uncertainties involved, and also the associated difficulties of turning plans into concrete actions, White then makes some tentative suggestions as to how policy might respond to these threats.

OMFIF and the BSIA (Balsillie School of International Affairs)  jointly published on 16 September a piece authored by William White. He contends that the global economic system, and indeed the state of mankind more generally, is more precarious than is commonly understood. Prior to the pandemic, the economic, political and environmental systems that underpin our democratic and capitalist institutions were already highly stressed. The pandemic, the Fourth Horseman of the Apocalypse, now threatens to trigger “tipping points”  that will not be easy to reverse. White remains optimistic that properly chosen policies can reduce these exposures, but they require answering a number of important questions. Not least, what past policies have contributed to the current, unsustainable state of affairs and should be avoided in the future? Spend and print is not a sustainable solution.

https://www.omfif.org/2020/09/unsustainable-policies-and-their-remedies/?utm_source=omfifupdate

The Institute for New Economic Thinking (INET) recently published a Working Paper by William White. He argues that changes to international financial regulations, post the 2008 crisis,were undoubtedly useful but still fall short of taming global “boom-bust” credit cycles. A macrofinancial stability framework, in which both monetary and macroprudential instruments were used to “lean against the wind” of credit booms, would seem the minimum requirement to achieve the desired objective. This should likely be complemented by other measures designed to change the behaviour of market participants (including higher capital requirements)and also the structure of  markets themselves. White also notes the shortcomings of individual regulatory changes, and refers to concerns raised about their coherence as a package. The paper concludes with a brief overview of more radical solutions for change suggested in the literature (eg, Free Banking and Narrow Banking) and a final observation. The current International Monetary (Non)System imposes no international discipline to mitigate national tendencies to excessive credit creation.

https://www.ineteconomics.org/perspectives/blog/why-international-financial-regulation-still-falls-short

This article will be published shortly as a chapter in a book “New Approaches to Economic Challenges: The Financial System” , published by the OECD in Paris. It is argued in the chapter that economies are Complex, Adaptive Systems (CAS). Such systems are widespread in nature and society,have been well studied by other disciplines, and have many shared characteristics. This communality implies that insights from other disciplines might inform macroeconomic policies as well. Ironically, the embrace of complexity leads to at least ten lessons for policymakers that, while revolutionary,  are both simple and intensely practical.

On 19 August, prior to its publication by the OECD, the chapter was also published as an article in the Swiss financial newspaper “The Market”.

https://themarket.ch/english/simple-lessons-for-macro-policymakers-from-embracing-complexity-ld.2503