End the obsession with interest

Abstract

Regulating leverage, not interest rates, is the answer to a troubled economy, says John Geanakoplos. Can science thrive during an economic downturn? In a series of seven Commentaries, introduced on page 957, specialists in policy-making, history, economics and innovation offer advice that might help. Jeffrey Sachs says that now's the time for developed nations to invest in the developing world to ensure environmental sustainability. Ian Taylor cautions against spending too much on blue-skies research: it's time to concentrate on ideas with immediate application. Eric Rauchway is encouraged by the scientific fallout from US government efforts to counter the Great Depression. In Japan too, the recession-spurred 'lost decade' of the 1990s resulted in a boost to basic science funding, as Atsushi Sunami and Kiyoshi Kurokawa explain. John Browning's advice to recent startups: sell whatever you can and cut costs drastically. Noreena Hertz sees an opportunity for global capitalism to become more egalitarian. And John Geanakoplos tells economists and governments how to avoid the next recession: collateral is king, and governments need to regulate how loans are issued with that in mind. More on http://www.nature.com/recessionwatch and http://www.nature.com/podcast .