"...what if the strong economy arises precisely because banks are weak? Rather than the positive sum relationship typically brandished – “a strong economy needs strong banks” – what if Germany exploits a more zero sum relationship, in which value is actively transferred from banks to the wider economy?"
And an interesting hypothesis about fraud in the extra readings section. Is there an optimal amount of fraud?
"We can’t check up on everything, and we can’t check up on nothing, so one of the key decisions that an economy has to make is how much effort to spend on checking. This choice will determine the amount of fraud. And since checking costs money and trust is really productive, the optimal level of fraud is unlikely to be zero.”
"...what if the strong economy arises precisely because banks are weak? Rather than the positive sum relationship typically brandished – “a strong economy needs strong banks” – what if Germany exploits a more zero sum relationship, in which value is actively transferred from banks to the wider economy?"
And an interesting hypothesis about fraud in the extra readings section. Is there an optimal amount of fraud?
"We can’t check up on everything, and we can’t check up on nothing, so one of the key decisions that an economy has to make is how much effort to spend on checking. This choice will determine the amount of fraud. And since checking costs money and trust is really productive, the optimal level of fraud is unlikely to be zero.”