We just visited the Financial Times, where Adam interviewed Martin Wolf about who we should blame for the crisis. The interview will be on tomorrow's podcast along with some discussion of the FT's popular Economists' Forum. For PM readers who've never heard of it, Wolf describes the forum as a place where a number of economists and others gather to share different angles on the current crisis. Today's piece comes from Ricardo Caballero, head of the department of economics at Massachusetts Institute of Technology:

No matter how many inefficient contortions and conversions individual financial institutions may do, until the problem of systemic panic is resolved, it is only a matter of time until the next crisis blows up in our faces. Those that think that solving the problems of one bank, by nationalizing it or otherwise, will restore confidence, fall into an extreme fallacy of composition: What may be the right solution for an isolated case, is not for a systemic problem.

Read the full essay here.

categories: Recommended Reading

4:36 - March 10, 2009

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