The momentum today behind the idea of a new global reserve currency reflects, in effect, the rise of the rest in world politics and economics, led by China.

One has to always ask the question: Where can one be most effective in helping shape policies? It is always difficult when you're inside because you're very constrained.

In fact, for just about 1/6 of the cost of an Iraq War, we could have put the social security system on sound financial footings for the next 50 to 75 years. The problems can be managed - but not if we continue to fight this war for another 80 years.

Negative effects on the economy were covered up with a flood of liquidity from the Fed. That,plus lax regulation, led to a housing bubble, a consumption boom - but we were living on borrowed money. It was inevitable that there would be a day of reckoning, and it has now come. We will be paying the costs "with interest".

As I noted in my Nobel lecture, an early insight in my work on the economics of information concerned the problem of appropriability - the difficulty that those who pay for information have in getting returns.

I've always been sceptical about the notion that the market is a person you can engage in an argument with, and that that person is an intelligent, rational, well-intentioned person: it is fantasy. We know that ... the market is subject to irrational optimism and pessimism, and is vindictive ... You're dealing with a crazy man ... Having got what he wants he will still kill you.

I don't think anybody really thinks that one should get rid of the World Bank. Reform is one thing, but getting rid of it I think would be wrong.