Inflation in the US and the world is declining, but major economies continue to struggle with imbalances and moral hazard.
• Emerging markets are successfully fighting inflation, but the global economy has not yet broken the impasse.
• Ignoring the historical context of economic development leads to political mistakes.
• The historical context of economic development is the key to political mistakes.
• Post-GFC financial reforms encourage regulatory arbitrage and increase the share of financial assets held by lightly regulated nonbank financial institutions.
• Central banks missed the opportunity to embark on serious quantitative tightening after the GFC.
• Growing government involvement in the economy raises expectations for additional public support and financial assistance.
• Measures to resolve the crisis could lead to increased concentration in the financial sector and elsewhere.
Inflation in the US and the world is declining, but major economies continue to struggle with imbalances and moral hazard.
• Emerging markets are successfully fighting inflation, but the global economy has not yet broken the impasse.
• Ignoring the historical context of economic development leads to political mistakes.
• The historical context of economic development is the key to political mistakes.
• Post-GFC financial reforms encourage regulatory arbitrage and increase the share of financial assets held by lightly regulated nonbank financial institutions.
• Central banks missed the opportunity to embark on serious quantitative tightening after the GFC.
• Growing government involvement in the economy raises expectations for additional public support and financial assistance.
• Measures to resolve the crisis could lead to increased concentration in the financial sector and elsewhere.