Today's Links

1) Alan Blinder on the importance of maintaining current monetary and fiscal policy

2) Krugman reacts to David Leonhardt's article on Sino-American economic relations. Krugman brings up an insightful point about our (flawed) emphasis on the bilateral nature of trade.
The argument that a reduction in China’s dollar purchases would be contractionary for America because it would drive up interest rates is equivalent to the argument that fiscal expansion is contractionary for the same reason — and equivalently wrong.
But what if China doesn’t spend more, but just reallocates its reserves from dollars to, say, euros? The answer is, that’s also good for us: a weaker dollar will help our exports, at Europe’s expense.


3) Niall Ferguson's refreshing historical account on financial regulation