The Price of Inaction
Are the world’s governments capable of keeping the world economy out of a deep and long depression? The problem is not that governments are unsure about what to do, but that that investor demand for safe, secure, and liquid assets – and thus their value – is too high, while demand for assets that underpin and finance the economy's productive capital is too low.
BERKELEY – Are the world’s governments capable of keeping the world economy out of a deep and long depression? Three months ago, I would have said yes, without question. Now, I am not so certain.