Believe those who are seeking the truth. Doubt those who find it. Andre Gide

Monday, March 16, 2009

Martin Hellwig on the Financial Crisis

Tired of all that sanctimonious drivel spewing from the likes of Dani Rodrik and Willem Buiter? Head aching from the cacophony of shrill voices rejoicing at the end of the world?

Then consult the good doctor Martin Hellwig; see here.

He also has a very nice article entitled "International Contagion: The Result of Information or Rhetoric?" that is well worth reading.

Would be interested to hear what people think.


  1. My initial impulse is that Dr. Hellwig's assertion that the current problems ultimately are of financial "system design" seem true. However his call for a re-evaluation of the "conceptual foundations of banking regulation and suprvision" is depressing. I am only left with more questions, like, what is the welfare criterion for implementing a global financial watchdog?

  2. Hellwig needs a bigger soapbox.
    The real tragedy is that the opportunity cost of debating stimulus packages in legislatures is the foregone discussion about financial sector regulation.
    This was a nice post.

  3. I liked his paper. A good mix of theoretical analysis, history, and synthesis (putting all the bits together). And not shrill. But I am curious as to why you thought it so very different from other stuff out there?

  4. Congratulations!

  5. Yeah, congrats. A fine accomplishment!

  6. Pani Pani: try not to get too discouraged. See if this helps; he expands on his views in this article:

    Nick: are you suggesting that a good mix of theoretical analysis, history, synthethis, sans par for the course out there? Maybe I'm reading the wrong stuff! (Actually, I am in Paris at the moment, stuffing myself with fresh baguettes...not really reading much at all).

  7. David, I had the same reflection as Nick. You need to read more liberal writers and economists for what you are looking for.

    Congratulations for the fellowship. Well deserved.

    Now that the fellowship is in the bag, how about sticking those sharp claws of yours into our economist-trained Prime Minister Stephan Harper? I'm dead sure that the Bank of Canada would love you to do a critical review of Harper versus Dodge, for example.

    Former BoC governor Dodge recently and emphatically disagreed with the rosy outlooks of both Harper and successor Carney. Dodge incidentally informed us that the late-boom GST tax cuts put the federal government in a position of running a structural deficit. (I didn't know that.)

  8. David: No, I was just wondering if you were liking it for the same or for different reasons than me.

  9. Nick: I believe I liked it for the same reason you did. He delves deeper into the issues in the paper I provided above for Pani Pani.

    Westslope: Would be happy to have you provide me some references to those more liberal writers. And yes, I would love to tear into Harper one day (and Flaherty too).

    And thank you all for the warm congratulations! I'll do everything I can to give the BoC (Candian taxpayer) a high return on their investment.

  10. Thanks for the article link. Dr. Hellwig's analysis is lot more nuanced and complete. Unfortunately sometimes the only voice that's heard is the shrill amongst the infoglut.

  11. Including some of your work in my thesis, keep it up!

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