This event is the fourth in the series The Political Economy of Liquidity, hosted by Katharina Pistor (Columbia Law School) and Matthias Thiemann (Sciences Po, Paris). It is a Money and Finance Idea Lab Seminar, part of the Center for Political Economy.
In recent years, the old orthodoxy of a clear separation between markets and states has given way to state policies that seek to leave decision making with private actors with the state nudging, insuring (ex ante), or backstopping (ex post) them by absorbing the risk private actors are unwilling or unable to take. Examples include private-public partnership (PPPs), environmental policies to encourage investments in green technologies, and monetary policies aimed at crisis prevention.
These public policies have earned the label “de–risking”, a term that creates the illusion of a win-win situation, in which efficient markets do their bidding with the state only lending a helping hand. Yet, risk cannot be purged from them but inevitably is shifted to others. This session explores the backstopping policies the leading central banks have developed since the Great Financial Crisis of 2008 and their effects on the structure of financial markets and the distribution of wealth.
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Discussants: Daniela Gabor and Martín Guzmán
Daniela Gabor is professor of Economics and Macrofinance at UWE Bristol (UK) and currently a member of the Institute for Advanced Studies at Princeton University. Her research includes critical central banking, collateral intermediation, shadow banking, IMF, capital controls, transnational banking.
Martín Guzmán is professor of Economics at Columbia University's School of International and Public Affairs and the former Minister of Economy of the Republic of Argentina. His research focuses on the emergence, propagation, and resolution of macroeconomic disequilibria, monetary economics, and economic development.
About the series The Political Economy of Liquidity
Money and finance are at once deeply imbricated and worlds apart. Different disciplines address one or the other in academia – money being relegated primarily to the field of macro-economics, whereas finance is treated with the tools of microeconomics and split between economics departments and business schools. Legal scholars have long ignored money and studied finance through the lens of banking or securities (capital market) regulation. And yet, a series of crises in recent decades has demonstrated how closely intertwined money and finance are, how deeply monetary policy affects not just interest rates, but the organization of markets and the instruments and intermediaries created by private actors. Conversely, financial innovations, such as the rise of the shadow banking system, or cryptocurrencies pose new challenges not just to financial regulation, but also to monetary policy.
This seminar aims at probing deeper into the relation of money and finance theoretically and concretely in terms of the institutional configurations of markets and their governance. It will be organized around themes that explore the intersection of money and finance. This term’s topic will be “The Political Economy of Liquidity.” It will convene four times during the fall term and is open access (subject only to registration). Each session will be introduced by two discussants before opening the seminar for a general discussion. Readings will be distributed in advance and made available online.
