Friday, 12 February 2010

A pessimistic Stiglitz

Today's Guardian carries a deeply pessimistic interview with Joseph Stiglitz, who notes that "Plans to re-regulate the financial markets have run into a political quagmire and there has been a resurgence of deficit fetishism", and goes on to express surprise at at how fast the forces in favour of the pre-2007 status quo have re-grouped. "The optimist in me is hopeful we won't need another crisis to finally motivate the political process," he said. "The pessimist in me says it may need to happen."

You can read the full interview here.

1 comment:

Paul Sweeney said...

A pity Prof Stiglitz is not heard here by our Government or economists or the economic commentariat. Most interesting yesterday too is that some of the economists in the IMF - yes the IMF - the oracle of orthodoxy (after Chicago) have rebelled against the dominant economic orthodoxy!
A staff paper co-authored by Olivier Blanchard, IMF chief economist, says the financial and economic crisis has “exposed flaws in the pre-crisis policy framework” and “forces us to think about the architecture of post-crisis macroeconomic policy”.
Chris Giles in the FT says "Suggestions include raising inflation targets from about 2 per cent to about 4 per cent so that monetary policy can better respond to shocks; automatic lump-sum payments for poorer families if unemployment rises above certain thresholds; exchange-rate intervention for smaller economies that depend heavily on trade; and giving central banks huge new regulatory tools so they can smooth the path of the economy."