 |  |
Central bankers aren't to blame for the crisis
In his first City AM column of 2012, Prof. Anthony J. Evans discusses who is actually to blame for the continuing global financial crisis.
"US economists Jeffrey R. Hummel and David Henderson prompted controversy by lending support to Ben Bernanke's theory of a 'global savings glut'. In a Cato Briefing Paper they argued that Alan Greenspan effectively froze the monetary base (i.e. the part of the money supply that the Fed controls). They argue that it was foreign investors' holdings of US Treasury bills that were putting downward pressure on short-term interest rates, and (rightly or wrongly) the Fed passively allowed it. In the 2011 Mundell-Fleming lecture, Hyun Song Shin argued that it was activity by EU central banks that was responsible for the low rates. Does it matter?"
To read the full article, please click here. You can also catch up on all of Anthony's articles by clicking here.
