In December 1718, the newly nationalised Banque Royale became France’s first de facto central bank. Under Scotsman John Law, it proceeded to issue paper money in what was arguably the first instance of quantitative easing. Central bankers take note: it ended very badly.
The former Fed chairman is famous for crushing inflation. His new memoir, “Keeping At It”, reveals the attributes that made him arguably America’s greatest central banker. His common sense, distrust of economic theory and personal integrity are valuable guides to his successors.
The last in a series of essays marking the 10th anniversary of the crisis argues the ultralow rates that inflated assets and led to widespread capital misallocation, wealth inequality, financial instability and other risks in advanced economies are even more evident in China.