Book review: grand pursuit: the story of economic genius.

Sylvia Nasar’s tour through the past 170 years of economic history introduces the reader to a dozen of the discipline’s most important figures, an equally compelling supporting cast, and the key economic events which shaped them, finds Garrick Hileman.

Sovereign debt sustainability, financial repression, and monetary innovation: Britain and currency black markets in the mid-20th century

The 1940s were the last time sovereign debt levels for many advanced economies were comparable to recent times. Following the Second World War the United Kingdom is viewed as having achieved the highest public debt to income ratio while still avoiding default of any country in last three centuries. However, previous research on the UK during this period has largely overlooked British post-war debt sustainability and the role played by financial repression. This thesis presents a conceptual framework of the mechanisms for achieving sovereign debt sustainability, along with their resultant political economy trade-offs. The conventional historical view that the UK avoided default on its sovereign financial agreements following the Second World War is re-examined and Britain is found to have ‘partially defaulted’ in the years following the Second World War. This thesis provides a historical narrative of the intellectual origins and policies of modern financial repression in Britain and presents alternative qualitative and quantitative measurements of financial repression. Monetary innovation accompanied 1930s-40s financial regulation, particularly the development of sophisticated currency black markets in New York and Switzerland. Statistical analysis of new daily time series data from these markets provides a quantitative market perspective on historical turning points during the 1940s. A currency taxonomy and discussion of the causes behind the rise and decline of alternative currencies is presented. While alternative currencies also featured during the 1940s they were arguably less numerous and less innovative than during the Great Depression period. The British case ultimately illustrates the complex dynamics and trade-offs of sovereign debt sustainability vis-à-vis other competing policy objectives, such as a desire for open markets and economic growth, financial stability, and geopolitical priorities

Cryptocurrencies: the future of money, speculative bubble or something else?

This month’s episode of the LSE IQ podcast investigates whether cryptocurrencies are the future of money, a speculative bubble that will burst, or something else

Book review: grand pursuit: the story of economic genius

Sylvia Nasar’s tour through the past 170 years of economic history introduces the reader to a dozen of the discipline’s most important figures, an equally compelling supporting cast, and the key economic events which shaped them, finds Garrick Hileman

The seven mechanisms for achieving sovereign debt sustainability

Sovereign debt crises are harmful reoccurring economic phenomena and the subject of how best to achieve sovereign debt sustainability is therefore of paramount importance. For decades economists have struggled to find a robust and consistent means of assessing sovereign debt sustainability. This paper argues that our understanding of sovereign debt sustainability can be enhanced by viewing this subject through the dual lenses of political economy and economic history. These two perspectives help identify seven distinct mechanisms for achieving sovereign debt sustainability. It is important to understand each of these methods as countries can, and often do, pursue multiple strategies in their efforts to achieve debt sustainability. Sovereign debt sustainability is often as much a political as an economic challenge with competing internal and external dimensions

Governance and control in distributed ledgers : understanding the challenges facing blockchain technology in financial services

As blockchain platforms are becoming increasingly noticeable in financial services and beyond, questions arise regarding their suitability to compete with or replace existing payment systems and marketplaces and redesign the financial infrastructures of the future. Prominent among these concerns are issues around governance and control in distributed ledgers: How are distributed ledger technologies governed? Can blockchains address complex administration problems? What key issues of note for practitioners and academics have emerged thus far? In this paper we aim to review the existing governance practices of established or popular blockchain and decentralized autonomous organization (DAO) systems with a view to understanding how they hold up in times of crises. What questions are raised when they are compromised or faced consensus challenges in coordinating action especially around control and accountability? We use a translational process, generating focal insights about present concerns from the reference point of completed academic studies and extensive practitioner consultation. Rather than adopting a declarative approach attempting to provide all the answers, we draw insights from the IT platform governance literature to offer a critical perspective for asking the right questions around key governance issues in financial infrastructure such as decision rights, control mechanisms, and incentives