Paradigm Shift – From how we do economics, to our understanding of how money and banking work to global development policy and achieving sustainable growth: The dawn of a New Era
This inaugural lecture will begin with refreshments in the Hugh Aston Atrium from 5.30pm, and the talk will start at 6.00pm, and will last for approximately one hour. A drinks reception with canapés will follow the talk in the Hugh Aston Atrium.
Professor Werner argues that it is time to get Alice back from Wonderland to face reality: Economics works differently from what we have been told for the past half century in “the West”. Money and banking work differently. Instead of unrealistic assumptions, empirical reality needs to drive our policies. This new Scientific Economics shows that countries can develop rapidly, and sustainable, non-inflationary, equitable growth without crises is possible. The geo-strategic implications are profound. We know this is not theory, because there is already a highly successful alternative development paradigm that had not been blinded by ideology, but had deployed Scientific Economics to deliver the most spectacular examples of high growth economics. Its goals have recently been re-oriented towards sustainable, green growth: The East Asian Economic Model is now reaching for the world, as seen in the Belt and Road initiative that is providing new impetus to a coordinated international development policy between China, Russia, the Indian Subcontinent and Africa, creating a new Eurasian-African development bloc.
Bio of Professor Richard A. Werner, D.Phil. (Oxon), FRSA
The LSE and Oxford-trained former chief economist at a British investment bank in Tokyo and former senior portfolio manager of a major US asset management firm in London combines academic rigour with a keen focus on empirical reality. Formerly Professor of International Banking at the University of Southampton, Professor of Economics at Goethe-University Frankfurt and Assistant Professor of Development Economics at Sophia University Tokyo, Professor Werner is also Chairman of Local First Community Interest Company, which promotes not-for-profit community banks. He is author of the bestselling book Princes of the Yen (www.quantumpublishers.com), which warned in 2003 that the ECB was likely to cause bank credit-driven asset bubbles, banking crises and major recessions with vast unemployment in the Eurozone. His 2005 book New Paradigm in Macroeconomics warned of the recurring banking crises and how to avoid or end them. As creator of the Quantity Theory of Credit, which disaggregates total bank credit creation (our money supply) into credit for the real economy (driving nominal GDP growth), and credit for asset transactions (driving asset prices and causing boom-bust cycles), he predicted in 1991, when Japan’s economy grew by 7% and the top 10 banks in the world were Japanese, that a major banking crisis and depression were imminent. He proposed the original “Quantitative Easing” (Nikkei, 2 September 1995) as a post-banking crisis policy, a term the Bank of Japan, then the Bank of England adopted. Professor Werner was the first to empirically demonstrate that banks are not intermediaries but creators of money – in open access articles that are among the most downloaded of all Elsevier publications (‘Can banks individually create money out of nothing?’ and ‘Lost century in economics’). His proposed solutions to Europe’s and Japan’s long slump have been recognised as highly workable (‘Enhanced Debt Management’ and strengthening networks of community banks).