End April Links

# Great satire of both economic methodology and its critics from Simon Wren-Lewis: Retiring macroeconomic theory

# Martin Wolf says ‘Too big to fail’ is too big to ignore: "The IMF suggests three options: restrict the size and activities of banks; reduce the probability of distress; and lower the probability and size of any bailout if a bank becomes distressed. Of these, the second is much the best. ... it is always the system, stupid. It would be quite wrong to suppose the chief problem is individual banks that are too important to fail. A system with a large number of small and interconnected banks exposed to correlated risks, on either their assets or their liabilities, would also be perilous. ... This is why higher equity requirements than the businesses alone would want are needed for all leveraged institutions. Systemic risks are the issue. Capital requirements related to such risks are needed, be the components of the system a few giants or a multitude of minnows."
I agree, but I think that regulation should also be biased in favour of a multitude of minnows over a few giants (contra the government arranged absorption of HBoS by LTSB). A system based on giants will be overly interconnected, but while a system composed of a multitude of minnows may be overly interconnected, it need not be.

# The eye, the needle and the camel: Rich countries can benefit from EU membership, by Campos, Coricelli, & Moretti

# Taxing, spending, and inequality - what is to be done? by Clements, Coady, de Mooij, & Gupta is consistent with my own work on inequality and fiscal policy

# I want to do something linking e.g. 'Why the elites are so ruthless that they destroy themselves' from the Resource Crisis blog which discusses the collapse of complex societies, with something much less scary sounding like Paul Cairney's 'What is complex government and what can we do about it?'

# Spot on from Matthew Yglesias: Beyond the Laffer Curve — the case for confiscatory taxation & No, inequality doesn't help the economy grow

# Adam Ramsay: "Confusing solidarity and centralisation was the greatest mistake of the left in the 20th century". Brilliant. From 40 reasons to support Scottish independence - reasons 1-3. I also like Clifford Singer's We must find ways to devolve economic power

# Interesting debate emerging: Martin Wolf calling for state monopoly on money creation, John Cochrane's Towards a run-free financial system, Francis Coppola's The death of banking, House of Debt's 100% Reserve Banking — The History, Krugman's Is a banking ban the answer?