Sebastian Mallaby uses the framework of central bank power to examine the rise and recent decline of the cult of the expert. He concludes that, ironically, experts need to play the political game if they hope to maintain their legitimacy; and that a healthy democracy is well served by a mix of public accountability and technocratic independence.
In this excerpt from his new book, More Money Than God, on the history of hedge funds, Sebastian Mallaby tells the story of the break-up of Europe's Exchange Rate Mechanism in 1992 from inside of George Soros's Quantum Fund.
Benn Steil argues that the world has no attractive alternatives to the current dollar-based international monetary system, but that the dollar's days of coasting on the accomplishments of the Volcker Fed are over. The Fed must demonstrate to the world anew that the dollar is a reliable long-term store of value.
Brad W. Setser writes about the United States' dependency on China as its largest creditor. He argues that the U.S. government should look to transition to a world in which more U.S. investment is financed by the United States' own savings.
The China Investment Corporation’s $5 billion investment in Morgan Stanley, its $3 billion investment in Blackstone and the China Development Bank’s likely $2b investment in Citigroup have attracted an enormous amount of attention. In this paper for RGE Monitor, Brad Setser examines the unprecedented growth in China ’s foreign assets, the key institutions managing these assets, and the composition of China's aggregate external portfolio.
With oil at $100, what do we know about how the big oil exporters are managing their petrodollars? In this paper for RGE Monitor, Brad Setser and Rachel Ziemba examine the different GCC funds and estimate that total Gulf investment abroad exceeded $2 trillion in 2007. One surprising conclusion that emerges from their analysis is that the Gulf as a whole has not diversified away from the dollar.
Learn more about CFR’s mission and its work over the past year in the 2016 Annual Report. The Annual Report spotlights new initiatives, high-profile events, and authoritative scholarship from CFR experts, and includes a message from CFR President Richard N. Haass. Read and download »