Desmond Lachman joined AEI after serving as a managing director and chief emerging market economic strategist at Salomon Smith Barney. He previously served as deputy director in the International Monetary Fund's (IMF) Policy Development and Review Department and was active in staff formulation of IMF policies. Mr. Lachman has written extensively on the global economic crisis, the U.S. housing market bust, the U.S. dollar, and the strains in the euro area. At AEI, Mr. Lachman is focused on the global macroeconomy, global currency issues, and the multilateral lending agencies.
Adjunct Professor, Georgetown University, 2010
Adjunct Professor, Johns Hopkins University, 2009
Managing Director and Chief Emerging Market Economic Strategist, Salomon Smith Barney, 1996-2003
Deputy Director, Policy Development and Review Department, International Monetary Fund, 1994-96
Senior Adviser, European Department, 1990-94; Division Chief, Western Hemisphere Department, 1984-90, International Monetary Fund
Over the past two years, European policymakers have not taken full advantage of favorable global market conditions. As a result, there remains a real risk that the Eurozone will experience yet another crisis once interest rates normalize.
The IMF is urging the ECB to implement massive quantitative easing, but such a course of action is unlikely to promote short-term economic growth and would risk creating bigger bubbles in many asset markets.
This now has to have been the third time in the past 15 years that the Fed has blown asset price bubbles through its excessively easy monetary policy stance. And seemingly the Fed learns nothing from the subsequent bursting of these bubbles.
The Federal Reserve needs recognize and act on the reality check from the Bank of International Settlements. The Fed’s timeframe is too short and they pay too little attention to asset and credit inflation. Hopefully, criticism from BIS will shift the Fed away from their focus on the immediate future instead of the bigger picture.