The End of Alchemy: A Review Essay

Roger Farmer

No 23156, NBER Working Papers from National Bureau of Economic Research, Inc

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: E0 E02 (search for similar items in EconPapers)
Date: 2017-02
New Economics Papers: this item is included in nep-mac
Note: EFG ME POL
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