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The End of Alchemy by Mervyn King: A Review Essay

Roger E. A. Farmer

Department of Economics at the University of Warwick and the National Institute of Economic and Social Research.

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 “pawnbroker 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 D81, D82, E44, G01, G18, G28, L51)

DOI

10.1257/jel.20171445

Volume

56 (3)

Pages

1102-1118

Language

en

Export

BibTeX

Sources

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