Richard Koo's "balance sheet recession"
On Thursday last week I participated at the ZSEM and Bloomberg Investment Conference , entitled " Redesigning Global and Regional Finance ". In addition to a series of interesting speakers, the keynote address was done by Richard Koo , Chief Economist at Nomura Research Institute, and the main advocate of the "balance-sheet recession" argument. This is, after all, the argument he is presenting in his 2008 book " The Holy Grail of Macroeconomics " (the idea has received a lot of attention in mainstream economics ). The presentation itself was excellent. He has managed to keep my undivided attention for the whole two hours, which is even more surprising since I didn't agree with some of his major points. Not since Arthur Laffer at the IEA last year has a speaker caught me with so much enthusiasm. Anyway, his major argument is that the current crisis is a "balance-sheet" recession, a term relatively new to the economic science, primari