Look at that, the Bank of Japan has joined other central banks in announcing an explicit inflation target, and doing all they can to show their credibility for achieving it. Good. Some will call this a currency war, or “monetization” – but again, this is the Bank targeting a specific inflation target in a forward […]
Good Noah Smith post on economic equilibrium. Equilibrium is a term that is often thrown around as an insult (I used to hear people talk dismissively about it at university), but in truth our concern with a model isn’t that it involves some sort of equilibrium but that we believe some of the core assumptions […]
I argue the deposit levy point (as a form of insurance) here. The only point I have to add is that some may say “why charge poor old depositors”. I’d note here that we need to think about the “incidence of tax” – if it is true that depositors have no market power, then the […]
As we said in the title, Ben Bernanke has ruled out that monetary policy in developed nations is akin to a “currency war”: The lessons for the present are clear. Today most advanced industrial economies remain, to varying extents, in the grip of slow recoveries from the Great Recession. With inflation generally contained, central banks […]
I’ve noticed an interesting interpretation of the Open Bank Resolution going around New Zealand, and the world, where it is seen as a replacement for the lender of last resort function and deposit guarantees. This has caused outrage among some – even I’ve received some emails and facebook messages from people on it. But the […]
This is a neat history of deposit insurance in the US (via Economist’s View). It is a clear indication that many of these debates have occurred in the past, and many of the ideas that float around nowadays are simply old ideas being given fresh life. In 1829, Forman proposed an insurance fund capitalized by […]