The End of Alchemy by Mervyn King: A Review Essay

Roger Farmer

Journal of Economic Literature, 2018, vol. 56, issue 3, 1102-18

Abstract: 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.

JEL-codes: D81 D82 E44 G01 G18 G28 L51 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/jel.20171445
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