Economy: Adding 'Financial Repression' to the Lexicon
Marc Chandler submits:With crisis comes new vocabulary. Out of the Great Depression came the use of the word "recession" to denote the end of a business cycle rather than crises, panics, and depressions, which had previously been used.The recent crisis has given rise to many new words, including "haircut," "re-profiling" and the "Vienna Agreement." To the lexicon, we must add "financial repression." Like the other words, the concept of "financial repression" existed long before this crisis, but its use has risen and is becoming more central to the debate. The term was first coined by Stanford economists in the early 1970s. It was meant to denote government action that designed to thwart or mitigate economic considerations in investment choices. Specifically, financial repression refers to official actions that run counter the market based incentive structure. In one expression, government could force some domestic participants to buy or hold bonds that they wouldComplete Story »
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