ftlessons20xx(编辑修改稿)

ftlessons20xx(编辑修改稿)内容摘要：

utting costs and hunkering down, others have not. Best practice across a wide range of management disciplines continues to be redefined as the search for next practice goes on. Goodbye, yellow brick road By Bill O39。 Rahilly Seldom can we draw upon fiction and witchcraft to direct us through economic history. But in 1964, Henry Littlefield, a school teacher, published a study entitled The Wizard of Oz: A Parable on Populism. In this essay he presented L. Frank Baum39。 s, The Wizard of Oz, as an allegory for late 19th century America. His description of this popular novel has echoes in today39。 s US economy. The story covers the 1890s, during which the US endured grinding deflation. Farming munities in the west, represented by the Scarecrow, saw their ines and asset values collapse and the real cost of debts rise. This benefited the bankers in the east in the guise of the Wicked Witch of the East. Throughout the period the gold standard was in operation, represented by the Yellow Brick Road. The supply of money was confined by the fixed availability of gold. According to Littlefield, Baum supported the Democratic prosilver candidacy of the time and wove this theme into his tale. Dorothy was the US, Oz gold, the Tin Man industry and the Emerald City Washington. Perhaps the allegory was lost on Messrs Metro Goldwyn and Mayer or maybe they employed artistic licence for visual effect. But in Baum39。 s original story, Dorothy did not have ruby shoes but silver ones, representing the silver campaign. In a National Democratic Convention debate on moary policy at the time, William Jennings Bryan, a littleknown Democrat, called for a move towards a silver standard. Silver would, he said, provide a more abundant reserve against which banks could produce money and ultimately reflate the economy. Drastic times called for dramatic rhetoric. Bryan39。 s manifesto earned him the Democratic presidential nomination that year as he electioneered: You shall not press down upon the brow of labour this crown of thorns, you shall not crucify mankind upon a cross of gold. Victory eluded Bryan in the 1897 election and the gold standard remained. Not long after, discoveries of gold in the Klondike and the Yukon led to an increase in gold reserves, which had the same effect on liquidity as moving to a silver standard the US economy eventually reflated. The big mistake of policymakers in the 1890s was slavish adherence to the gold standard. Bryan39。 s call for a break from the prevailing economic convention was too revolutionary to countenance. Indeed, the gold standard remained for a further 40 years. It again acted as a policy restraint after the 1927 crash, with more disastrous consequences. This time there were no serendipitous discoveries of gold. The consequence of policy inflexibility was the Depression of the 1930s. Learning from the past, the Federal Reserve has already gone some way to embracing Bryan39。 s school of thought by breaking with policy norms and deploying preemptive and forceful measures. The Fed maintains that it is easier to prevent deflation than cure it. If we consider International Moary Fund studies of Japan in the early 1990s, it is clear that the onset of deflation can be insidious and can lead to unsuitable policies that at the time appear appropriate. This is why, despite signs of recovery, the Fed has continuously cut interest rates. Although current policies may stoke inflation in the future, the Fed would rather face inflation than deflation down the track. In the deflationary arena, traditional relationships and systems bee distorted. We can no longer rely on conventional policy responses to buoy economic growth. Hence interest rates have been reduced to their lowest levels in 50 years, the dollar has declined by 30 per cent against the euro and federal taxes have been cut by $350bn. Though such measures are not unusual per se, the bination, speed and degree to which they have been invoked recently marks them as dramatic and unforeseen. Exchange rate policy alone can be highly potent. Consider the effect that Franklin Roosevelt39。 s 40 per cent reduction of the dollar against gold had in 193334. This depreciation led to a surge in money supply that precipitated an end to deflation by 1934 and sparked one of the most vigorous stockmarket rallies in a century. Some recent economic data indicate that the threat of deflation is beginning to wane. But the Fed will probably maintain an acmodative stance until it is certain of that. During this transition period, we could see an oute that echoes 1999, when the Fed told markets it would provide liquidity to protect financial systems against a possible slowdown induced by the millennium bug (Y2K). Ultimately, when it became evident that the advent of Y2K would pass without a ripple, this excess liquidity was sucked into markets and fuelled a bull run in equities. If observers today view the Fed as overpensating against deflation, we could see a shift in liquidity from bonds and property to equities, prompting another Y2Kstyle bull run. For the time being, the Fed39。 s goal is to ward off deflation。 if that means straying from the Yellow Brick Road of policy orthodoxy, so be it. Any unwele rise in the longer end of the yield curve will more than likely be countered by rhetoric to that effect from Fed members. Much has changed since Baum wrote his tale. The Scarecrow39。 s fields are full of geically modified soya and the Tin Man has silicon ponents. Yet as before, the Good Witch in the Fed will endeavour to bring Dorothy safely back home to Aunt Em. The writer is a Dublinbased investment banker 通向通缩的黄砖路 The yellow brick road that leads to deflation 古往今来，很少有人通过小说或巫术来研 究经济史。 但在 1964 年，一位名叫亨利 •利特菲尔德 (Henry Littlefield)的教师发表了一篇论文，题为《绿野仙踪：民粹主义寓言》 (The Wizard of Oz: A Parable on Popul。