Between Debt and the Devil

Author: Adair Turner
Publisher: Princeton University Press
ISBN: 9781400885657
Release Date: 2017-08-02
Genre: Business & Economics

Adair Turner became chairman of Britain's Financial Services Authority just as the global financial crisis struck in 2008, and he played a leading role in redesigning global financial regulation. In this eye-opening book, he sets the record straight about what really caused the crisis. It didn’t happen because banks are too big to fail—our addiction to private debt is to blame. Between Debt and the Devil challenges the belief that we need credit growth to fuel economic growth, and that rising debt is okay as long as inflation remains low. In fact, most credit is not needed for economic growth—but it drives real estate booms and busts and leads to financial crisis and depression. Turner explains why public policy needs to manage the growth and allocation of credit creation, and why debt needs to be taxed as a form of economic pollution. Banks need far more capital, real estate lending must be restricted, and we need to tackle inequality and mitigate the relentless rise of real estate prices. Turner also debunks the big myth about fiat money—the erroneous notion that printing money will lead to harmful inflation. To escape the mess created by past policy errors, we sometimes need to monetize government debt and finance fiscal deficits with central-bank money. Between Debt and the Devil shows why we need to reject the assumptions that private credit is essential to growth and fiat money is inevitably dangerous. Each has its advantages, and each creates risks that public policy must consciously balance.

Between Debt and the Devil

Author: Adair Turner
Publisher:
ISBN: 0691175985
Release Date: 2017-02-22
Genre: Business & Economics

Adair Turner became chairman of Britain's Financial Services Authority just as the global financial crisis struck in 2008, and he played a leading role in redesigning global financial regulation. In this eye-opening book, he sets the record straight about what really caused the crisis. It didn't happen because banks are too big to fail--our addiction to private debt is to blame. Between Debt and the Devil challenges the belief that we need credit growth to fuel economic growth, and that rising debt is okay as long as inflation remains low. In fact, most credit is not needed for economic growth--but it drives real estate booms and busts and leads to financial crisis and depression. Turner explains why public policy needs to manage the growth and allocation of credit creation, and why debt needs to be taxed as a form of economic pollution. Between Debt and the Devil shows why we need to reject the assumptions that private credit is essential to growth and that fiat money is inevitably dangerous. Each has its advantages, and each creates risks that public policy must consciously balance.

Between Debt and the Devil

Author: Adair Turner
Publisher: Princeton University Press
ISBN: 9781400873326
Release Date: 2015-10-20
Genre: Business & Economics

Adair Turner became chairman of Britain's Financial Services Authority just as the global financial crisis struck in 2008, and he played a leading role in redesigning global financial regulation. In this eye-opening book, he sets the record straight about what really caused the crisis. It didn’t happen because banks are too big to fail—our addiction to private debt is to blame. Between Debt and the Devil challenges the belief that we need credit growth to fuel economic growth, and that rising debt is okay as long as inflation remains low. In fact, most credit is not needed for economic growth—but it drives real estate booms and busts and leads to financial crisis and depression. Turner explains why public policy needs to manage the growth and allocation of credit creation, and why debt needs to be taxed as a form of economic pollution. Banks need far more capital, real estate lending must be restricted, and we need to tackle inequality and mitigate the relentless rise of real estate prices. Turner also debunks the big myth about fiat money—the erroneous notion that printing money will lead to harmful inflation. To escape the mess created by past policy errors, we sometimes need to monetize government debt and finance fiscal deficits with central-bank money. Between Debt and the Devil shows why we need to reject the assumptions that private credit is essential to growth and fiat money is inevitably dangerous. Each has its advantages, and each creates risks that public policy must consciously balance.

Economics After the Crisis

Author: Adair Turner
Publisher: MIT Press
ISBN: 9780262300995
Release Date: 2012-03-23
Genre: Business & Economics

The global economic crisis of 2008--2009 seemed a crisis not just of economic performance but also of the system's underlying political ideology and economic theory. But a second Great Depression was averted, and the radical shift to New Deal-like economic policies predicted by some never took place. Perhaps the correct response to the crisis is simply careful management of the macroeconomic challenges as we recover, combined with reform of financial regulation to prevent a recurrence. In Economics After the Crisis, Adair Turner offers a strong counterargument to this somewhat complacent view. The crisis of 2008--2009, he writes, should prompt a wide set of challenges to economic and political assumptions and to economic theory. Turner argues that more rapid growth should not be the overriding objective for rich developed countries, that inequality should concern us, that the pre-crisis confidence in financial markets as the means of pursuing objectives was profoundly misplaced.

Fixing Global Finance

Author: Martin Wolf
Publisher: JHU Press
ISBN: 9780801898433
Release Date: 2010-07-01
Genre: Business & Economics

Sharply and clearly argued, Wolf’s prescription for fixing global finance illustrates why he has been described as "the world's preeminent financial journalist."

Other People s Money

Author: John Kay
Publisher: PublicAffairs
ISBN: 9781610396042
Release Date: 2015-09-22
Genre: Business & Economics

The finance sector of Western economies is too large and attracts too many of the smartest college graduates. Financialization over the past three decades has created a structure that lacks resilience and supports absurd volumes of trading. The finance sector devotes too little attention to the search for new investment opportunities and the stewardship of existing ones, and far too much to secondary-market dealing in existing assets. Regulation has contributed more to the problems than the solutions. Why? What is finance for? John Kay, with wide practical and academic experience in the world of finance, understands the operation of the financial sector better than most. He believes in good banks and effective asset managers, but good banks and effective asset managers are not what he sees. In a dazzling and revelatory tour of the financial world as it has emerged from the wreckage of the 2008 crisis, Kay does not flinch in his criticism: we do need some of the things that Citigroup and Goldman Sachs do, but we do not need Citigroup and Goldman to do them. And many of the things done by Citigroup and Goldman do not need to be done at all. The finance sector needs to be reminded of its primary purpose: to manage other people’s money for the benefit of businesses and households. It is an aberration when the some of the finest mathematical and scientific minds are tasked with devising algorithms for the sole purpose of exploiting the weakness of other algorithms for computerized trading in securities. To travel further down that road leads to ruin.

The End of Alchemy Money Banking and the Future of the Global Economy

Author: Mervyn King
Publisher: W. W. Norton & Company
ISBN: 9780393247039
Release Date: 2016-03-21
Genre: Business & Economics

“Mervyn King may well have written the most important book to come out of the financial crisis. Agree or disagree, King’s visionary ideas deserve the attention of everyone from economics students to heads of state.” —Lawrence H. Summers Something is wrong with our banking system. We all sense that, but Mervyn King knows it firsthand; his ten years at the helm of the Bank of England, including at the height of the financial crisis, revealed profound truths about the mechanisms of our capitalist society. In The End of Alchemy he offers us an essential work about the history and future of money and banking, the keys to modern finance. The Industrial Revolution built the foundation of our modern capitalist age. Yet the flowering of technological innovations during that dynamic period relied on the widespread adoption of two much older ideas: the creation of paper money and the invention of banks that issued credit. We take these systems for granted today, yet at their core both ideas were revolutionary and almost magical. Common paper became as precious as gold, and risky long-term loans were transformed into safe short-term bank deposits. As King argues, this is financial alchemy—the creation of extraordinary financial powers that defy reality and common sense. Faith in these powers has led to huge benefits; the liquidity they create has fueled economic growth for two centuries now. However, they have also produced an unending string of economic disasters, from hyperinflations to banking collapses to the recent global recession and current stagnation. How do we reconcile the potent strengths of these ideas with their inherent weaknesses? King draws on his unique experience to present fresh interpretations of these economic forces and to point the way forward for the global economy. His bold solutions cut through current overstuffed and needlessly complex legislation to provide a clear path to durable prosperity and the end of overreliance on the alchemy of our financial ancestors.

Saving the City

Author: Richard Roberts
Publisher: Oxford University Press
ISBN: 9780199646548
Release Date: 2013-11
Genre: Business & Economics

A week before the outbreak of the First World War, an acute financial crisis surged over London: the Stock Exchange closed; money markets worldwide were paralysed. Drawing on diaries, letters, memoirs, press reports, and official archives, this book tells the extraordinary, and largely unknown, story of the first true global financial crisis.

Economic Policy

Author: Agnès Bénassy-Quéré
Publisher: Oxford University Press, USA
ISBN: 9780195322736
Release Date: 2010
Genre: Business & Economics

Is the inflation objective of the European central bank set too low? Is European national debt excessive? Is a fixed or floating exchange rate better? Which taxes should be reformed? Can the European standard of living catch up with that of the United States? This book, a translation of a book published in French (de Boeck, 2004), brings precisely argued answers to these questions using rigorous economic analysis. The authors join together for the first time in one volume the fundamentals of the macroeconomic field with analysis of current debates in economic policy. They take the point of view of a policy maker who must intervene in one particular aspect of policy, and thus they put the reader at the cutting edge of the main issues, debates and challenges related to each policy aspect. Economic Policy explores in an open-ended way what various existing theories, macro and micro, have to say on these current policies, and points out the limits of each theory. Overall, it demonstrates to the reader how he or she can build upon the combination of existing theories and also on common sense in order to design adequate policy responses. The work will appeal to a large audience, including students in economics, management, and political science graduate schools, and professional economists and policy makers interested in issues in macroeconomics.

Europe s Orphan

Author: Martin Sandbu
Publisher: Princeton University Press
ISBN: 9781400885510
Release Date: 2017-03-14
Genre: Business & Economics

Originally conceived as part of a unifying vision for Europe, the euro is now viewed as a millstone around the neck of a continent crippled by vast debts, sluggish economies, and growing populist dissent. In Europe's Orphan, leading economic commentator Martin Sandbu presents a compelling defense of the euro. He argues that rather than blaming the euro for the political and economic failures in Europe since the global financial crisis, the responsibility lies firmly on the authorities of the eurozone and its member countries. The eurozone's self-inflicted financial calamities and economic decline resulted from a toxic cocktail of unforced policy errors by bankers, politicians, and bureaucrats; the unhealthy coziness between finance and governments; and, above all, an extreme unwillingness to restructure debt. Sandbu traces the origins of monetary union back to the desire for greater European unity after the Second World War. But the euro’s creation coincided with a credit bubble that governments chose not to rein in. Once the crisis hit, a battle of both ideas and interests led to the failure to aggressively restructure sovereign and bank debt. Ideologically informed choices set in motion dynamics that encouraged more economic mistakes and heightened political tensions within the eurozone. Sandbu concludes that the prevailing view that monetary union can only work with fiscal and political union is wrong and dangerous—and risks sending the continent into further political paralysis and economic stagnation. Contending that the euro has been wrongfully scapegoated for the eurozone’s troubles, Europe’s Orphan charts what actually must be done for the continent to achieve an economic and political recovery. This revised edition contains a new preface addressing the economic and political implications of Brexit, as well as updated text throughout. Europe’s Orphan charts what actually must be done for the continent to achieve a full recovery.

Monetary Theory and Policy from Hume and Smith to Wicksell

Author: Arie Arnon
Publisher: Cambridge University Press
ISBN: 9781139492089
Release Date: 2010-11-22
Genre: Business & Economics

This book provides a comprehensive survey of the major developments in monetary theory and policy from David Hume and Adam Smith to Walter Bagehot and Knut Wicksell. In particular, it seeks to explain why it took so long for a theory of central banking to penetrate mainstream thought. The book investigates how major monetary theorists understood the roles of the invisible and visible hands in money, credit and banking; what they thought about rules and discretion and the role played by commodity-money in their conceptualizations; whether or not they distinguished between the two different roles carried out via the financial system - making payments efficiently within the exchange process and facilitating intermediation in the capital market; how they perceived the influence of the monetary system on macroeconomic aggregates such as the price level, output and accumulation of wealth; and finally, what they thought about monetary policy.

Just Financial Markets

Author: Lisa Herzog
Publisher: Oxford University Press
ISBN: 9780198755661
Release Date: 2017-04-13
Genre: Business & Economics

Financial markets raise not only questions of economic efficiency, but also questions of justice - especially in highly 'financialized' societies such as ours. This volume brings together leading scholars from political theory, law, and economics in order to discuss the relationship between financial markets and justice. This relationship is multi-facetted: it concerns not only the normative foundations of how we think about justice and financial markets, but alsothe legal framework within which financial markets take place, and which currently tends to favour certain players more than others. There are also questions of justice with regard to specificinstitutions such as central banks or rating agencies, and with regard to the representation of women and other minorities in financial markets. And finally, there is the question of why reform is so slow. This accesible volume brings together analyses and proposals for reform, inviting us to rethink the place and role of financial markets in our societies.

Bluff

Author: Anjum Hoda
Publisher: Oneworld Publications
ISBN: 9781780748146
Release Date: 2016-06-09
Genre: Business & Economics

The financial crisis of 2008 was caused by greedy, unscrupulous bankers. Luckily, the Bank of England and the US Federal Reserve were our firefighters. These central banks rescued us from the brink of collapse and resuscitated our economies. Except that isn’t the whole story. A simplistic narrative, it glosses over one inconvenient truth – it was the firefighters who started the fire. Experienced asset management adviser Anjum Hoda contends that our central banks have been playing a deceitful game for decades. They’ve been using interest rates to stimulate the value of assets so that we would feel better off and spend more, thereby generating growth in the ‘real’ economy. But the supply of cheap money through manipulation of interest rates creates instability not growth, because real-world salaries fail to keep pace. Highly arresting and sobering, Bluff has significant implications for the decisions we make about own finances and even our mid- to long-term life strategies. Hoda’s thesis is set out with clarity and power, and her prediction is this – without radical systematic change only greater crises lie ahead.

The Dollar Trap

Author: Eswar S. Prasad
Publisher: Princeton University Press
ISBN: 9781400873647
Release Date: 2015-08-25
Genre: Business & Economics

The U.S. dollar's dominance seems under threat. The near collapse of the U.S. financial system in 2008–2009, political paralysis that has blocked effective policymaking, and emerging competitors such as the Chinese renminbi have heightened speculation about the dollar’s looming displacement as the main reserve currency. Yet, as The Dollar Trap powerfully argues, the financial crisis, a dysfunctional international monetary system, and U.S. policies have paradoxically strengthened the dollar’s importance. Eswar Prasad examines how the dollar came to have a central role in the world economy and demonstrates that it will remain the cornerstone of global finance for the foreseeable future. Marshaling a range of arguments and data, and drawing on the latest research, Prasad shows why it will be difficult to dislodge the dollar-centric system. With vast amounts of foreign financial capital locked up in dollar assets, including U.S. government securities, other countries now have a strong incentive to prevent a dollar crash. Prasad takes the reader through key contemporary issues in international finance—including the growing economic influence of emerging markets, the currency wars, the complexities of the China-U.S. relationship, and the role of institutions like the International Monetary Fund—and offers new ideas for fixing the flawed monetary system. Readers are also given a rare look into some of the intrigue and backdoor scheming in the corridors of international finance. The Dollar Trap offers a panoramic analysis of the fragile state of global finance and makes a compelling case that, despite all its flaws, the dollar will remain the ultimate safe-haven currency.

Saving Europe

Author: Carlo Bastasin
Publisher: Brookings Institution Press
ISBN: 9780815726142
Release Date: 2015-01-23
Genre: Business & Economics

In this gripping narrative, Carlo Bastasin reconstructs the main political decisions of the euro crisis, unveiling the hidden interests and the secret diplomacy behind the scene. The European dream was both the rejection of war and the creation of a new spirit of peaceful cooperation. Yet confrontation has been the hallmark of the euro crisis, and national opportunistic gimmicks have driven the awkward attempts to solve the crisis itself. Today, Europe is in a crisis of democracy, which Bastasin has dubbed, "the first War of Interdependence of the global age." Praise for the first edition of Saving Europe Bastasin does an admirable job in analysing the euro-zone's economic challenges and is a sure-footed guide through the seemingly endless European Union summit meetings that were supposed to resolve them. He also has an eye for the human detail that makes his sad account of institutional muddle surprisingly compelling. — Financial Times Bastasin's book is worth reading for its detailed political narrative of the eurozone crisis to date, focusing on the interaction among decision-makers in Europe's capitals. — Foreign Affairs A reconstruction that may be considered definitive. Revelations on the European negotiations are written with talent and go hand in hand with no-esoteric economic analysis and with the right amount of realism to reach the political substance. —Corriere della Sera Anyone looking for general knowledge and deeper understanding of the crisis, I can recommend a formidable analysis by Carlo Bastasin: Saving Europe. The author is a very unusual combination of a qualified economist and driven journalism. —Svenska Dagbladet