Timothy A. Canova

The Swedish Model Betrayed

This article provides a history of Swedens financial liberalization, with special attention on the deregulation of interest rates and the ceiling on housing loans from banks and finance institutions. Throughout the 1980s, Swedens Prime Minister Olof Palme stood out on the international stage as one of the leading opponents of the financial deregulation, monetarism, and fiscal austerity. The article recounts his efforts to resist and then compromise with this neoliberal agenda. After Palmes sudden assassination, in February 1986, the new government accepted a Riksbank proposal for elimination of Swedens long-standing system of foreign exchange controls - the transnational policy analog to the domestic credit controls that had been abolished just months earlier. As a result, the government and the central bank were soon without the policy tools to slow down an overheating economy and housing bubble, or to protect the currency from speculative attack. In September 1992, the Riksbank raised the interest rate on overnight borrowing to 500 percent. What followed was a collapse and bailout in the banking sector, a redistribution of wealth and power to creditor groups, severe recession and double-digit unemployment rates.

The New Global Dis/Order in Central Banking and Public Finance

A review of central bank governance and monetary policy, with a focus on the Federal Reserve, the myth of its independence and its role in and response to the 2008 financial crisis.

Who Runs the Fed

The 2008 financial crisis challenged many orthodox assumptions in finance and economics, including the proper role and accountability of central banks. The U.S. Federal Reserve, commonly known as the Fed, is the world’s most powerful central bank.

Keynesian Comparative Economics The Iconoclastic Vision of Lynn Turgeon (1920-1999)

The authors of this article review the late E. Lynn Turgeons contributions to economics, including his studies of the Soviet economy, use of qualitative and demographic analyses, his Keynesian critique of U.S. economic performance, and his critique of international financial markets. Turgeons comparative approach led to unique insights about the challenges that confronted planned economies, including the differential impact of military spending on the demand-constrained economy of the United States and the supply-constrained economy of the Soviet Union. His study of the Soviet and planned economies also informed his analysis of the U.S. economy and international adjustment mechanisms. Turgeon argued for expansionary fiscal and neutral monetary policies, prudential restrictions on portfolio capital flows, and increased foreign direct investment and foreign assistance to shift the burdens of adjustment from deficit to surplus countries. Throughout his career, Turgeon measured economic policies by their effects on real people, including impacts on employment, the environment, living standards, and distributions of income and wealth.

The Macroeconomics of William Vickrey

This article analyzes the work of the late Dr. William Vickrey, the McVickar Professor Emeritus of Columbia University and 1996 Nobel-laureate in Economics. In choosing Vickrey for the Nobel prize, the Royal Swedish Academy of Sciences notes Vickreys fundamental contributions to the economic theory of incentives, which he applied to the areas of taxation, auction theory, and pricing. His work focused on the economics of asymmetric and private information. Critics of Vickreys full-employment macroeconomic vision have noted that his Nobel was awarded not for such progressive views but for his earlier work in microeconomics. This article connects Vickreys early theoretical work with his full-employment blueprint.