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
One has to wonder what Olli Rehn, the European Union’s Commissioner for Economic and Monetary Policy Affairs, is looking at when he boldly asserts that deflation is not a risk for Euro member countries. Not only does he seem to be glossing over the rapid pace of disinflation that has already occurred in Europe.
In the aftermath of the Great Recession, major central banks have scrambled to support economic recovery and to avoid deflation through highly accommodative and unorthodox monetary policy stances. Although relatively successful in the short term, these policies have given rise to incipient asset- and credit-market bubbles and to spillover effects on the emerging-market economies.
Despite the present calm in European financial markets, all is far from well in the Eurozone's political economy. Yet, true to form, European policymakers are showing no sign of taking advantage of this calm to adopt those measures that might place the Euro on a surer footing.
Easy global liquidity from quantitative easing in the United States has masked deflation and public debt vulnerability in the European periphery, and the European Central Bank shows little sign of pursuing policies to address these threats.
Fannie Mae and Freddie Mac are reporting profits, but remain wards of the state, and although Ben Bernanke was the chief financier of the crisis, the post–Bernanke world will begin on January 31, 2014. What then? These and other relevant issues will be addressed by our expert panel.
If China seriously wanted to reduce its dollar holdings, it should seek to do so through a co-ordinated effort with the US to redress the underlying saving and investment imbalances that give rise to the need for China to continue accumulating dollars.
For much of the past year, ever-optimistic European policymakers entertained the hope that there would be a radical easing in German policy towards the European sovereign debt crisis following that country’s federal elections.