Journal of Economic Literature
ISSN 0022-0515 (Print) | ISSN 2328-8175 (Online)
The End of Alchemy by Mervyn King: A Review Essay
Journal of Economic Literature
vol. 56,
no. 3, September 2018
(pp. 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.Citation
Farmer, Roger E A. 2018. "The End of Alchemy by Mervyn King: A Review Essay." Journal of Economic Literature, 56 (3): 1102–18. DOI: 10.1257/jel.20171445Additional Materials
JEL Classification
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D82 Asymmetric and Private Information; Mechanism Design
- E44 Financial Markets and the Macroeconomy
- G01 Financial Crises
- G18 General Financial Markets: Government Policy and Regulation
- G28 Financial Institutions and Services: Government Policy and Regulation
- L51 Economics of Regulation