The years since the 2008 financial crisis have been among the strangest in the history of monetary policy. Interest rates have been lower than at any time since the Industrial Revolution. Governments have been issuing debt in unprecedented quantities, and central banks have been buying the debt back. But this era seems to be coming to an end. Interest rates around the world are rising. Markets talk not of quantitative easing but of quantitative tightening.
What has been going on? Edward Chancellor’s new book offers a very long-term perspective, beginning in Babylon and ending with Covid. The book combines historical scholarship with a deep understanding of modern financial markets. The first known legal code—that of the Babylonian king Hammurabi—was, Chancellor explains, mainly concerned with financial regulation. Still, he observes, “drawing up financial regulations is one thing but getting people to follow the spirit of the law is another matter”. Almost 5,000 years after Hammurabi, some things have not changed.
You can read more at Prospect here.