Are we all Debt Liquidationists now? … No!

by Andreas Hoffmann

A growing number of economists suggest that governments in highly indebted countries should consider liquidating debt via financial repression. In other words, they want governments to intervene in financial markets and push government borrowing costs below the rate of inflation to erode the real value of debt. In a previous post, I argued that financial repression is dangerous and a drag on growth. This post explains why we can be hopeful that, despite a rise in popularity, the debt liquidationists will not succeed in putting their ideas to work. Debt liquidation via financial repression would necessitate far-reaching regulation or drastic measures, both of which seem unlikely in the US.

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Summer Reading

 by Jerry O’Driscoll  

My summer reading actually began in the spring and included a number of books written on the financial crisis that I was asked to review by various publications.  My reviews will appear in fall issues. I can report that a number of the books written for the general public are quite good.  These include, but are not limited to, works by John Taylor, Thomas Sowell and George Melloan.

I am currently reading This Time is Different: Eight Centuries of Financial Folly by Carmen Reinhart and Kenneth Rogoff. This is a major work and, while written to be accessible to the general public, contains a wealth of material for specialists. The book was in preparation years before the crisis, and its 2009 publication was fortuitous. Continue reading