Mais Lecture 2015
Departing International Monetary Fund Chief Economist Olivier Blanchard gave the 31st annual Mais Lecture at Bunhill Row.
Introducing Dr Blanchard, Dean Professor Steve Haberman said that Mais had an “outstanding pedigree” as a set-piece event for setting out future policy. Previous speakers have included Chancellor George Osborne and Governor of the Bank of England, Mark Carney.
Professor Haberman said: “The principle theme of the lectures has been monetary policy. Our speaker follows in a very proud tradition. Last week the Washington Post called Dr Blanchard the ‘smartest economist you’ve never heard of’ – I think that’s a compliment!”
Dr Blanchard’s lecture to a packed theatre was entitled, Rethinking Macroeconomic Policy. He took the audience through the last 25 years and discussed potential future outcomes.
Dr Blanchard said: “I’m honoured to be added to the list of great speakers. Rethinking macroeconomic policy is something that of course we have all thought about over the last seven years.”
Dr Blanchard looked at the current status of macroeconomics, both drawing lessons from recent crises and looking forward. The recent crises have shed doubts on the pre-crisis macroeconomic consensus on interest rate as the primary tool of an inflation-targeting monetary policy regime, focused exclusively on price stability, he said. On the real side of the economy, lower productivity growth and the aging of societies have resulted in a new mediocre growth path, with lower interest rates needed to equate savings and investment. He warned that although chances of a drastic slump in Chinese growth are small, it would cause a global crisis if it did happen.
Cass Professor of Banking and Finance, Thorsten Beck, said: “His thoughts were informed both by his long and distinguished academic career as by his experience as IMF Chief Economist over the past seven years.”