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Journal of Economic Literature Vol. 56 No. 3 2018

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.

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 “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.

DOI
10.1257/jel.20171445
Volume
56
Issue
3
Pages
1102-1118
Language
en
Sources
crossref openalex

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