Fed accused of 'drink driving'

Former Vice President and Chief Economist of the World Bank (and Nobel Prize winner for economics) accuses the US Federal Reserve of behaving like a drunk driver over its conduct of monetary policy.

In an interesting article in the Guardian, Joseph Stiglitz shifts attention from the symptons of the global economic downturn to the causes. Stiglitz argues that the current economic crisis is part of the "unwinding of 'global imbalances'". He calls for long term solutions to these imbalances and offers three solutions:

First, we need to reverse the worrying trends of growing inequality.
Second, the world needs enormous investments if it is to respond to the challenges of global warming.
Third, a global reserve system is needed. It makes little sense for the world's poorest countries to lend money to the richest at low interest rates.

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