In today’s FT you can found superb article by former IMF chief economist Kenneth Rogoff. Reading this article was a pleasant surprise for me as it is very rare for main stream economist to refer to reflexive bubbles. In the article Rogoff points out that that the real issue is not whether conventional economic theory can rationalize bubbles but the real issue is to detect bubbles. I reckon that without a good theory this task is impossible and I think that economist toolbox will be soon extended by out of equilibrium tools like LPPL.
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Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts
Thursday, April 8, 2010
Wednesday, June 10, 2009
the global fiscal outlook is somber
IMF has released a Staff position note: Fiscal implications of the global economic crisis. Conclusion of the note is simple the global fiscal outlook is somber. Present fiscal cost of the crises + aging populations in advanced economies will strongly contribute to increase in DEBT/GDP ratios in the future. Also this momentum may raise the question of fiscal solvency. What is then the next big thing?
a) rising inflation
b) fiscal insolvency
c) a+b
or c) (put here something optimistic) 
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