Economists tend to agree that explosive deleveraging in the banking sector was a central element of the 2008 global financial crisis. This column argues that such deleveraging is far from unique. In fact, there is a ‘bank leverage cycle’ in which bank leverage, assets and GDP ramp up and down together; and this is true across financial subsectors. Such procyclicality strengthens the case for macroprudential regulations.VOX.eu
Bank leverage cycles
Galo Nuño, Economist at the European Central Bank, and Carlos Thomas
Economist, Banco de España
At least they read some Minsky. Now they really need to read some Mosler. Their solutions are RHS instead of LHS.
6 comments:
More 'observing' while not 'perceiving'....
Rsp
I'm surprised they didn't cite John Geanakoplos, e.g.: http://cowles.econ.yale.edu/P/cd/d17a/d1715-r.pdf
And will Mosler read Gorton, Shin, Brunnermeier, Adrian, Geanakopolos...?
And will Mosler read Gorton, Shin, Brunnermeier, Adrian, Geanakopolos...?
Highly unlikely, if he is anything like me. When I find a major problem that undermines the foundation of a positon, I stop reading, since I have to bugget my time. I allocate time and energy to things that I think will advance my understanding, and that means being selective.
Unless, of course, I am interesting understanding where and how someone has gone wrong and am preparing a critique.
Highly unlikely
I think you're right.
And I agree that since time is limited, one has to make choices about how that time is spent.
The problem is that it's not really possible to make a critique of those things that one has chosen, for reasons of limited resources, to ignore. At any rate, it's impossible to make an informed critique.
At any rate, it's impossible to make an informedcritique.
That's true, but people send me stuff in the hope I'll read it and maybe do something with it. But as soon as I find something wrong, I stop reading and let them know why I stopped. Agreed that is not a critique, but it is a good reason in my book.
There are generally two responses I receive. The first and most prevalent is, "you need to read the whole thing." My response is, "sorry, no time."
The second is a reasoned statement of why I may be jumping to conclusions to quickly. If I am convinced, I'll continue reading. But that is very rare.
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