On warmer days, Hélène Rey likes to scoot across Regent’s Park to her work amid the white colonnades of the London Business School. She shows off her skills down the narrow corridor outside her small, book-lined office, deftly touching the back brake of the scooter’s aluminum frame with her left foot as she speeds along.
“My house is just across the park, so it’s convenient,” says the prize-winning economics professor. “There’s wild herons, bright green parakeets, and lots of ducks. Even the occasional black swan—turns out they are not so rare,” she says with a chuckle. Indeed a couple of Regent’s Park black swans, which traditionally mate for life, made headlines in the global media a while ago because they had to be separated by park keepers when they squabbled too much during courting.
Best-selling author Nassim Nicholas Taleb adopted the term black swan events to describe rare happenings that have major repercussions in the business and financial sectors but were completely unpredictable or thought unlikely, as black swans are in nature.
“In reality though,” says Rey, “black swans are not totally abnormal,” referring to the Taleb version. “I don’t think big shocks are a very unusual thing. It depends on the system and the incentives you give to people.”
Farhi, Emmanuel, Pierre-Olivier Gourinchas, and Hélène Rey, 2011, Reforming the International Monetary System (London: Centre for Economic Policy Research).
Gourinchas, Pierre-Olivier, and Hélène Rey, 2005, “From World Banker to World Venture Capitalist: U.S. External Adjustment and Exorbitant Privilege,” NBER Working Paper No. 11563 (Cambridge, Massachusetts: National Bureau of Economic Research).
Martin, Philippe, and Hélène Rey, 2006, “Globalization and Emerging Markets: With or Without Crash?” The American Economic Review, Vol. 96, No. 5, pp. 1631–51.
Obstfeld, Maurice, and Alan M. Taylor, 2004, Global Capital Markets: Integration, Crisis, and Growth (New York: Cambridge University Press).
Rey, Hélène, 2013, “Dilemma Not Trilemma: The Global Financial Cycle and Monetary Policy Independence” (Kansas City, Missouri: Federal Reserve Bank).