Published work
Dowd's main subject of research is private money and free banking—monetary and financial systems that operate without any government intervention and in the absence of any central bank. A related focus of his work is on central banking and other forms of state intervention into economies, most particularly, on deposit insurance, the lender of last resort and bank capital adequacy regulation. He has repeatedly called for the abolition of central banks and an end to state intervention in the financial system.
He advocates competitive monetary systems. His work, New Private Monies—a Bit-Part Player?, is supportive of private gold money systems such as the Liberty Dollar and e-gold, and expresses support for Bitcoin. Dowd is a supporter of commodity-based monetary systems such as the gold standard and is a critic of fiat-based money issued by a central bank.
Dowd takes a largely Austrian approach to economics, but one that is heavily influenced by the Quantity Theory of Money and the work of monetarists such as Milton Friedman and David Laidler. He supports laissez-faire, and is critical of Keynesian and other interventionist schools of economics.
He has proposed a free-market approach to the resolution of the ongoing financial crisis, [3] based on extended personal liability for senior bankers, the exit of the state from the financial system and the restoration of a sound monetary standard. To this end, he has also advised Steve Baker, the Conservative MP for Wycombe, on his two Private Member's Bills to resolve the crisis: the Financial Services (Regulation of Derivatives) Bill, [4] which sought to restore sound accounting standards, and the Financial Institutions (Reform) Bill, [5] which called for radical reforms to the banking system and an end to state involvement in banking.
Dowd has repeatedly argued that the Global Financial Crisis has never been resolved and that the policies adopted since 2007 have been ineffective, illegal and counter-productive. He believes that a renewed outbreak of the crisis is therefore likely, with the prospects of financial collapse, high inflation and government insolvency around much of the developed world.
Dowd has also written extensively on financial risk measurement and management. He has argued that financial modelling is conceptually invalid because it is based on a naïve 'scientistic' belief that economic systems can be modelled using quantitative methods inappropriately imported from natural sciences such as physics. He is particularly critical of the widely used Value-at-Risk or VaR risk measure, [6] the assumptions inherent to, and so the use of the "normal" or Gaussian distribution in risk management, [7] and the use of financial risk models for regulatory purposes. [8]
Dowd is the co-inventor of the PensionMetrics Defined-Contribution (DC) stochastic pension model, [9] and the Stochastic Lifestyling asset allocation strategy. [10] He and David Blake have proposed a set of good principles in the modelling of DC pension plans, [11] and with Debbie Harrison, Blake and Dowd have recently published two reports into the state of the DC pensions market in the UK: Caveat Venditor, [12] which advocated that pensions should be governed by the principle of seller not buyer beware, and VfM, [13] which examined value for money in the UK pensions market. These reports were critical of the high charges, over-complexity and lack of transparency in the UK pensions industry.
In the life actuarial field, Dowd and collaborators have written on the financial implications of mortality and longevity risk. They invented survivor swaps, [14] survivor swaptions, [11] the CBD mortality model, [15] and the gravity two-population mortality model. [16]
Dowd also works with Cobden Partners, a sovereign advisory service based in London, and is a founding member of the Sofia Business School, [17] based in Sofia, Bulgaria.
