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The new economy and the old monetary economics

Buiter, Willem H. (2000) The new economy and the old monetary economics. Bank of England Quarterly Bulletin, 40 (2). pp. 173-183. ISSN 0005-5166

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Abstract

In this speech,(1) Willem H Buiter, member of the Bank’s Monetary Policy Committee,(2) argues that the behaviour in recent years of the world economy, led by the United States, can, in the opinion of a number of observers, only be understood by abandoning the old conventional wisdoms and adopting a ‘New Paradigm’. Prominent among the structural transformations associated with the New Paradigm are the following: increasing openness; financial innovation; lower global inflation; lower profit margins, reflecting stronger competitive pressures; buoyant stock markets defying conventional valuation methods; a lower natural rate of unemployment; and a higher trend rate of growth of productivity. In this speech, Professor Buiter makes two distinct points. First, the New Paradigm has been over-hyped. Second, to the extent that we can see a New Paradigm in action, its implications for monetary policy have often been misunderstood.

Item Type: Article
Official URL: http://www.bankofengland.co.uk/publications/Pages/...
Additional Information: © 2000 Bank of England
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Sets: Departments > European Institute
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 21 Nov 2008 16:02
URL: http://eprints.lse.ac.uk/16881/

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