BEGIN:VCALENDAR
VERSION:2.0
PRODID:-//Talks.cam//talks.cam.ac.uk//
X-WR-CALNAME:Talks.cam
BEGIN:VEVENT
SUMMARY:Economic Policy in Asset and Deflation Cycles. - Prof Elias Karaki
 tsos Director\, Guildhall Asset Management\, Ltd
DTSTART:20110202T160000Z
DTEND:20110202T170000Z
UID:TALK29027@talks.cam.ac.uk
CONTACT:Ellen Ihrig
DESCRIPTION:In the last ten years or so business cycles are no longer dema
 nd- or supply-led\, but asset-led driven by excessive liquidity. This liqu
 idity has been created gradually by financial liberalisation and financial
  engineering and has financed a series of bubbles\, such as the internet (
 2000)\, housing (2007) and commodities (2008). As the ramifications of the
  burst of these bubbles is a recession\, major central banks\, such as the
  Fed and the Bank of England\, have responded not only by cutting interest
  rates\, but also by printing money\, which euphemistically has been calle
 d ‘quantitative easing’. Advocates of these policies have pointed out 
 the risk of deflation\, whereas critics have concentrated on the risk of i
 nflation\, at least in the long run. This paper examines the validity of t
 hese views and goes one step further in arguing that such policies lead to
  economic instability\, namely business cycles of ever increasing amplitud
 e\, in which each recession is worse than the previous one and requires mo
 re quantitative easing. A simple model is used to illustrate this instabil
 ity and suggests how monetary policy should be formulated to restore econo
 mic stability. 
LOCATION:Mill Lane Lecture Rooms\, Room 4
END:VEVENT
END:VCALENDAR