The Resolution of International Financial Crises: Private Finance and Public Funds

Over the past year and a half, authors Andy Haldane of the Bank of England and Mark Kruger of the Bank of Canada have been developing a framework for the resolution of international financial crises that aligns incentives for all parties in a way that deals with the crisis and preserves the integrity of the international financial system. The framework is built on principles, not rules. It attempts to be clear about the respective roles and responsibilities of the public and private sectors. A central element in shaping private sector expectations is knowledge that the official sector will behave predictably. Constraints on lending by the International Monetary Fund are a key step in that direction. They ensure that private sector involvement is a crucial part of crisis resolution, and they help encourage debtors and creditors to seek co-operative solutions to a crisis. Characterized by constraints, clarity, and orderliness, the framework has the potential to reduce the incidence and cost of financial crises.

Collingridge and the dilemma of control: towards responsible and accountable innovation

The paper critically reviews the work of David Collingridge in the light of contemporary concerns about responsibility and accountability in innovation, public engagement with science and technology, and the role of scientific expertise in technology policy. Given continued interest in his thoughts on the ‘social control of technology’, and the ‘dilemma of control’, this attention is both timely and overdue. The paper illuminates a mismatch between the prevalence of citations to Collingridge’s work on the dilemma of control in the literature on responsible innovation, and the depth of engagement with his arguments. By considering neglected aspects of Collingridge’s substantive, methodological and philosophical analysis, important implications can be drawn for theory and practice relating to the governance of innovation and co-evolution between technology and society. The paper helps to improve understandings of wider political contexts for responsible innovation, especially in relation to anticipatory, participatory and institutional aspects of governance

Understanding the role of eco-evolutionary feedbacks in host-parasite coevolution

It is widely recognised that eco-evolutionary feedbacks can have important implications for evolution. However, many models of host-parasite coevolution omit eco-evolutionary feedbacks for the sake of simplicity, typically by assuming the population sizes of both species are constant. It is often difficult to determine whether the results of these models are qualitatively robust if eco-evolutionary feedbacks are included. Here, by allowing interspecific encounter probabilities to depend on population densities without otherwise varying the structure of the models, we provide a simple method that can test whether eco-evolutionary feedbacks per se affect evolutionary outcomes. Applying this approach to explicit genetic and quantitative trait models from the literature, our framework shows that qualitative changes to the outcome can be directly attributable to eco-evolutionary feedbacks. For example, shifting the dynamics between stable monomorphism or polymorphism and cycling, as well as changing the nature of the cycles. Our approach, which can be readily applied to many different models of host-parasite coevolution, offers a straightforward method for testing whether eco-evolutionary feedbacks qualitatively change coevolutionary outcomes

The Resolution of International Financial Crises: Private Finance and Public Funds

Over the past year and a half, the Bank of England and the Bank of Canada have been developing a framework for the resolution of international financial crises that aligns incentives for all parties to deal with a crisis and preserve the integrity of the international financial system. The framework is built on principles, not rules. It attempts to be clear about the respective roles and responsibilities of the public and private sectors. A central element in shaping private sector expectations is knowledge that the official sector will behave predictably. Constraints on lending by the International Monetary Fund are a key step in that direction. They ensure that private sector involvement is a crucial part of crisis resolution, and they help encourage debtors and creditors to seek co-operative solutions to a crisis. Characterized by constraints, clarity, and orderliness, the framework has the potential to reduce the incidence and cost of financial crises.International topics

Base Money Rules in the UK

This paper assesses the performance of a simple monetary policy rule - McCallum's rule. This rule targets nominal income using the monetary base as its instrument whilst making an allowance for any on-going changes in money velocity. The paper conducts a range of historical counterfactual simulation exercises to establish the likely impact on the UK economy of using such a rule over the period 1960 to 1994. The paper finds that had the rule been followed over that period a far superior inflationary performance would have resulted. Moreover, this improved performance would not have come about at the expense of heightened output or base money variability. The paper suggests that while such a rule could never substitute a more eclectic approach which uses a wider range of indicators, it could serve as a useful benchmark when assessing whether monetary policy is broadly "on track"; it is a effectively a dynamic M0 monitoring range. As such, the implied profiles from such a simple rule may help provide insurance against the type of "big" policy mistakes which the UK economy has been subject to over the last 25 years.