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Paul Krake
Paul Krake


Short and succinct, the piece primarily features Olivier Blanchard who is a brilliant economic mind. His paper, "Back to Future" is worth a look. Main takeaways: 1) the notion that the financial system is self adjusting / stabilizing is flawed. 2) Policy makers must be more focused on the financial system as a source of stress. 3) inflation targets may to too low as we may not give ourselves enough cushions when recessions / crisis reappear because nominal yields are kept too low. The last six recessions have seen rates rise around 500bps. Under the current framework, this looks highly unlikely during this cycle.

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