Some prominent economists argue that failures in the international monetary system are the root cause of the global crisis. This column introduces a new eReport arguing that, at the very least, the international monetary system is inefficient and destabilising for the global economy. It proposes a number of reforms, the common thread of which is to increase the conditional supply of liquidity and reduce its unconditional demand.
by Emmanuel Farhi, Pierre-Olivier Gourinchas, and Hélène Rey at VOXeu. The authors are all associated with CEPR, of which Dean Baker is co-director.