The End of Alchemy by Mervyn King: A Review Essay

• Autores: Roger E. A. Farmer
• Localización: Journal of economic literature, ISSN 0022-0515, Vol. 56, Nº 3, 2018, págs. 1102-1118
• Idioma: inglés
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• Resumen

  • I review The End of Alchemy by Mervyn King, published by W.W. Norton and Company in 2016. I discuss King's proposed regulatory reform, the "Pawn Broker for All Seasons" (PFAS), and I compare it to an alternative solution developed in my own work. I argue that unregulated trade in the financial markets will not, in general, lead to Pareto optimal allocations. As a consequence, solutions like the PFAS that correct problems with existing institutions are likely to be circumvented by the development of new ones.