Publication

This paper discusses puzzling economic trends observed in the past and suggests alternative explanations. The author describes existing financial imbalances and suggests ways that policymakers might deal with them. In its last section, the paper offers suggestions for a new domestic policy framework that might reduce the chances of generating harmful financial imbalances in the future. After identifying some practical impediments to such alternative domestic regimes being made operational, the author pays attention to how these impediments might be removed. He concludes by looking at parallels between a domestic macrofinancial stabilization framework and the international monetary system.