07 January 2012

Unintended Consequences

A working paper produced by an economist within the IMF recently warned about possible unintended consequences of regulations "aimed at financial stability" that focus on "building equity and reducing leverage at large banks/dealers."

Here is an abstract to the work, by Manmohan Singh.

As you'll see if you visit that page, those of us who allude to the existence of this paper are sternly warned that it "should not be reported as representing the views of the IMF." It represents the views of Mr Singh alone.

Coincidentally, Mr Singh has the same name, first and last, as the current prime minister of India. This has fueled conspiracy theories about the prime minister as a "world bank/IMF agent".

The name, though, is the only connection. The IMF economist didn't leave that employment to become PM of India!  He is still there, and this paper bears a quite recent release date as if to illustrate the point.

At any rate, the paper appears to me to be sound work and I hope it draws a wide audience.

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Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.