Process, Responsibility, and Myron's Law
Chapter 12 (p. 111-23), in In the Wake of the Crisis: Leading Economists Reassess Economic Policy, Olivier J. Blanchard, David Romer, A. Michael Spence and Joseph E. Stiglitz (eds.) Cambridge: MIT Press, 2012.
In the wake of the financial crisis, any rethinking of macroeconomics has to include an examination of the rules that govern the financial system. This examination needs to take a broad view that considers the ongoing dynamics of those rules. It will not be enough to come up with a new set of specific rules that seem to work for the moment. We need a system in which the specific rules in force at any point in time evolve to keep up with a rapidly changing world.
A diverse set of examples suggests that there are workable alternatives to the legalistic, process-oriented approach that characterizes the current financial regulatory system in the United States. These alternatives give individuals responsibility for making decisions and hold them accountable. In this sense, the choice is not really between legalistic and principlebased regulation. Instead, it is between process and responsibility