Richard Koo: Macroeconomic Management After a Crisis (2/7)

The video shows the panel Macroeconomic Management After a Financial Crisis at INET's Bretton Woods Conference on April 9, 2011. The speaker in this segment is Richard Koo, Chief Economist at the Nomura Research Institute. The other panelists are Duncan Foley, Marco Seccareccia, Alan Taylor, Carmen Reinhart, and John Smithin.

• Category

  People & Blogs

[Barry Thompson]

Koo is spot on. Why do so few policymakers understand that if the private sector is paying down debt and the government also pays down debt then the money supply shrinks. Someone has to borrow money to sustain the flow of credit and therefore the flow of incomes in the economy.

[Tom Slobko]

Obama and the Republicans will cut spending. And we will have a depression. Sad, but O will go down as the Herbert Hoover of this century.

[althiaby]

How would it possible to leaverage when your balance sheet under the water!!!

[dudeman209]

Not if you have your own currency. If you have your own currency, the central bank can just come in and buy the bonds. This will eventually cause inflation, but in a situation like now where inflation is at lows, inflation would actually help to wipe out the debts.

The problem with the countries in the Eurozone is that their debts are not denominated in their own currency, which creates a lot of problems (as we are seeing now).

[JustAintthatWay]

impressive case made but ...

at some govt deficit spending point doesnt the overall debt

grow so large that it collapses upon its own weight

i.e. no one will any longer buy govt bonds and so it defaults?

[Tim Hilton]

spending is good.

[Tim Hilton]

99 cents out of every dollar of stolen wealth in this country came from the bush taxcuts. 99% of the problem goes away with reimbursement and removal of those tax cuts.

[DavidByrne85]

Except no FDR is coming to the rescue

[MrEviloreo]

hanjian

[StevenCHKim]

I know right, the idiots ringing Koo were all ears, and I bet nobody else on the panel had a theory that comes close to offering and understanding, and from there a solution, of the current crisis that Koo does.