Friday, June 13, 2008

Links on regulations

When 'regulations' are on your mind, you end up seeing them all over the place, I suppose. First a couple of quotes:

  1. The moral of this story is that failure to regulate effectively isn’t just bad for consumers, it’s bad for business. [Paul Krugman, in his latest NYTimes column]

  2. ... successful markets need to be embedded in a larger set of man-made rules and governance structures. Markets need regulation, stabilization, and legitimation because they are not self-regulating, self-stabilizing, or self-legitimizing. The success of modern capitalism is due as much to the institutions that govern markets--political democracy above all--as it is to the power of markets themselves. [Dani Rodrik]

Recently, the subprime crisis (and the spectacular collapse of Bear Stearns) led to calls for regulations of the investment banking industry by the Fed. This flared up into a passionate debate among econ bloggers; as an outsider, I found the discussions quite educational. If you are interested, start with Mark Thoma, and Brad DeLong (and again), and follow the links.