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Tag: Economics In Action
In the modern financial economy, the main effect of QE is to boost asset prices, as market gyrations of recent weeks have clearly illustrated. But is the pursuit of higher asset prices an effective or desirable means of promoting economic growth?
To pass the watchtowers and barbed-wire fences on the Finnish-Russian border is to be reminded of how fragile, and how recent, are the stability and security we take for granted today.
We will succeed in managing financial risk better only when we come to recognise the limitations of formal modelling. Control of risk is almost entirely a matter of management competence, well-crafted incentives, robust structures and systems, and simplicity and transparency of design.