front cover of Surviving Large Losses
Surviving Large Losses
Financial Crises, the Middle Class, and the Development of Capital Markets
Philip T. Hoffman, Gilles Postel-Vinay, and Jean-Laurent Rosenthal
Harvard University Press, 2009

Listen to a short interview with Philip T. HoffmanHost: Chris Gondek | Producer: Heron & Crane

Financial disasters often have long-range institutional consequences. When financial institutions--banks, insurance companies, brokerage firms, stock exchanges--collapse, new ones take their place, and these changes shape markets for decades or even generations. Surviving Large Losses explains why such financial crises occur, why their effects last so long, and what political and economic conditions can help countries both rich and poor survive--and even prosper--in the aftermath.Looking at past and more recent financial disasters through the lens of political economy, the authors identify three factors critical to the development of financial institutions: the level of government debt, the size of the middle class, and the quality of information that is available to participants in financial transactions. They seek to find out when these factors promote financial development and mitigate the effects of financial crises and when they exacerbate them.Although there is no panacea for crises--no one set of institutions that will resolve them--it is possible, the authors argue, to strengthen existing financial institutions, to encourage economic growth, and to limit the harm that future catastrophes can do.

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Austrian Reconstruction and the Collapse of Global Finance, 1921–1931
Nathan Marcus
Harvard University Press, 2018

In 1921 Austria became the first interwar European country to experience hyperinflation. The League of Nations, among other actors, stepped in to help reconstruct the economy, but a decade later Austria’s largest bank, Credit-Anstalt, collapsed. Historians have correlated these events with the banking and currency crisis that destabilized interwar Europe—a narrative that relies on the claim that Austria and the global monetary system were the victims of financial interlopers. In this corrective history, Nathan Marcus deemphasizes the destructive role of external players in Austria’s reconstruction and points to the greater impact of domestic malfeasance and predatory speculation on the nation’s financial and political decline.

Consulting sources ranging from diplomatic dossiers to bank statements and financial analyses, Marcus shows how the League of Nations’ efforts to curb Austrian hyperinflation in 1922 were politically constrained. The League left Austria in 1926 but foreign interests intervened in 1931 to contain the fallout from the Credit-Anstalt collapse. Not until later, when problems in the German and British economies became acute, did Austrians and speculators exploit the country’s currency and compromise its value. Although some statesmen and historians have pinned Austria’s—and the world’s—economic implosion on financial colonialism, Marcus’s research offers a more accurate appraisal of early multilateral financial supervision and intervention.

Illuminating new facets of the interwar political economy, Austrian Reconstruction and the Collapse of Global Finance reckons with the true consequences of international involvement in the Austrian economy during a key decade of renewal and crisis.

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Last Resort
The Financial Crisis and the Future of Bailouts
Eric A. Posner
University of Chicago Press, 2018
The bailouts during the recent financial crisis enraged the public. They felt unfair—and counterproductive: people who take risks must be allowed to fail. If we reward firms that make irresponsible investments, costing taxpayers billions of dollars, aren’t we encouraging them to continue to act irresponsibly, setting the stage for future crises? And beyond the ethics of it was the question of whether the government even had the authority to bail out failing firms like Bear Stearns and AIG.
           
The answer, according to Eric A. Posner, is no. The federal government freely and frequently violated the law with the bailouts—but it did so in the public interest. An understandable lack of sympathy toward Wall Street has obscured the fact that bailouts have happened throughout economic history and are unavoidable in any modern, market-based economy. And they’re actually good. Contrary to popular belief, the financial system cannot operate properly unless the government stands ready to bail out banks and other firms. During the recent crisis, Posner agues, the law didn’t give federal agencies sufficient power to rescue the financial system. The legal constraints were damaging, but harm was limited because the agencies—with a few exceptions—violated or improvised elaborate evasions of the law. Yet the agencies also abused their power. If illegal actions were what it took to advance the public interest, Posner argues, we ought to change the law, but we need to do so in a way that also prevents agencies from misusing their authority. In the aftermath of the crisis, confusion about what agencies did do, should have done, and were allowed to do, has prevented a clear and realistic assessment and may hamper our response to future crises.

Taking up the common objections raised by both right and left, Posner argues that future bailouts will occur. Acknowledging that inevitability, we can and must look ahead and carefully assess our policy options before we need them.
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A Failure of Capitalism
The Crisis of ’08 and the Descent into Depression
Richard A. Posner
Harvard University Press, 2009

The financial and economic crisis that began in 2008 is the most alarming of our lifetime because of the warp-speed at which it is occurring. How could it have happened, especially after all that we’ve learned from the Great Depression? Why wasn’t it anticipated so that remedial steps could be taken to avoid or mitigate it? What can be done to reverse a slide into a full-blown depression? Why have the responses to date of the government and the economics profession been so lackluster? Richard Posner presents a concise and non-technical examination of this mother of all financial disasters and of the, as yet, stumbling efforts to cope with it. No previous acquaintance on the part of the reader with macroeconomics or the theory of finance is presupposed. This is a book for intelligent generalists that will interest specialists as well.

Among the facts and causes Posner identifies are: excess savings flowing in from Asia and the reckless lowering of interest rates by the Federal Reserve Board; the relation between executive compensation, short-term profit goals, and risky lending; the housing bubble fuelled by low interest rates, aggressive mortgage marketing, and loose regulations; the low savings rate of American people; and the highly leveraged balance sheets of large financial institutions.

Posner analyzes the two basic remedial approaches to the crisis, which correspond to the two theories of the cause of the Great Depression: the monetarist—that the Federal Reserve Board allowed the money supply to shrink, thus failing to prevent a disastrous deflation—and the Keynesian—that the depression was the product of a credit binge in the 1920s, a stock-market crash, and the ensuing downward spiral in economic activity. Posner concludes that the pendulum swung too far and that our financial markets need to be more heavily regulated.

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Front Page Economics
Gerald D. Suttles, with Mark D. Jacobs
University of Chicago Press, 2010

In an age when pundits constantly decry overt political bias in the media, we have naturally become skeptical of the news. But the bluntness of such critiques masks the highly sophisticated ways in which the media frame important stories. In Front Page Economics, Gerald Suttles delves deep into the archives to examine coverage of two major economic crashes—in 1929 and 1987—in order to systematically break down the way newspapers normalize crises.

Poring over the articles generated by the crashes—as well as the people in them, the writers who wrote them, and the cartoons that ran alongside them—Suttles uncovers dramatic changes between the ways the first and second crashes were reported. In the intervening half-century, an entire new economic language had arisen and the practice of business journalism had been completely altered. Both of these transformations, Suttles demonstrates, allowed journalists to describe the 1987 crash in a vocabulary that was normal and familiar to readers, rendering it routine.

A subtle and probing look at how ideologies are packaged and transmitted to the casual newspaper reader, Front Page Economics brims with important insights that shed light on our own economically tumultuous times.

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The Credit Crunch
Housing Bubbles, Globalisation and the Worldwide Economic Crisis
Graham Turner
Pluto Press, 2008

This book argues that the current financial turmoil signals a crisis in globalisation that will directly challenge the free market economic model.

Graham Turner shows that the housing bubbles in the West were deliberately created to mask the damage inflicted by companies shifting production abroad in an attempt to boost profits. As these bubbles burst, economic growth in many developed countries will inevitably tumble. The Japanese crisis of the 1990s shows that banks and governments may struggle to contain the fallout. The problem has not been limited to the US, UK and Europe: housing bubbles have become endemic across wide swathes of emerging market economies. As the West slides, these countries will see an implosion of their credit bubbles too, shaking their faith in the free market.

Turner is an experienced and successful economic forecaster, whose opinions are sought by large international banks and top financial journalists. Drawing from his first hand experience of the Japanese property crash of the 1990s, he presents his analysis in a clear and persuasive style, showing that the end of housing market growth spells disaster for neoliberal globalisation.

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No Way to Run an Economy
Why the System Failed and How to Put It Right
Graham Turner
Pluto Press, 2009

In The Credit Crunch, Graham Turner predicted that banks would be nationalised and interest rates would be reduced too slowly to halt the crisis. His predictions were correct. His new book, No Way to Run an Economy, is the essential guide to the turbulent times ahead.

Turner recommended radical measures, such as quantitative easing, in early 2008 but argues that action has been taken too late and been too timid to make a real difference. He dissects the policy mistakes of the last 12 months including Obama's doomed market-led response to the crisis and the obsession of central banks with the red herring of inflation.

There is no doubt the economy is still in serious trouble, but Turner shows that learning from the mistakes made so far can prevent a situation worse than that of the 1930s crisis.

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Masters of the Universe, Slaves of the Market
Stephen Bell and Andrew Hindmoor
Harvard University Press, 2015

This account of the financial crisis of 2008–2009 compares banking systems in the United States and the United Kingdom to those of Canada and Australia and explains why the system imploded in the former but not the latter. Central to this analysis are differences in bankers’ beliefs and incentives in different banking markets.

A boom mentality and fear of being left behind by competitors drove many U.S. and British bank executives to take extraordinary risks in creating new financial products. Intense market competition, poorly understood trading instruments, and escalating system complexity both drove and misled bankers. Formerly illiquid assets such as mortgages and other forms of debt were repackaged into complex securities, including collateralized debt obligations (CDOs). These were then traded on an industrial scale, and in 2007 and 2008, when their value collapsed, economic activity fell into a deep freeze. The financial crisis threatened not just investment banks and their insurers but also individual homeowners and workers at every level. In contrast, because banks in Canada and Australia could make good profits through traditional lending practices, they did not confront the same pressures to reinvent themselves as did banks in the United States and the United Kingdom, thus allowing them to avoid the fate of their overseas counterparts.

Stephen Bell and Andrew Hindmoor argue that trading and systemic risk in the banking system need to be reined in. However, prospects for this are not promising given the commitment of governments in the crisis-hit economies to protect the “international competitiveness” of the London and New York financial markets.

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The Banks Did It
An Anatomy of the Financial Crisis
Neil Fligstein
Harvard University Press, 2021

A comprehensive account of the rise and fall of the mortgage-securitization industry, which explains the complex roots of the 2008 financial crisis.

More than a decade after the 2008 financial crisis plunged the world economy into recession, we still lack an adequate explanation for why it happened. Existing accounts identify a number of culprits—financial instruments, traders, regulators, capital flows—yet fail to grasp how the various puzzle pieces came together. The key, Neil Fligstein argues, is the convergence of major US banks on an identical business model: extracting money from the securitization of mortgages. But how, and why, did this convergence come about?

The Banks Did It carefully takes the reader through the development of a banking industry dependent on mortgage securitization. Fligstein documents how banks, with help from the government, created the market for mortgage securities. The largest banks—Countrywide Financial, Bear Stearns, Citibank, and Washington Mutual—soon came to participate in every aspect of this market. Each firm originated mortgages, issued mortgage-backed securities, sold those securities, and, in many cases, acted as their own best customers by purchasing the same securities. Entirely reliant on the throughput of mortgages, these firms were unable to alter course even when it became clear that the market had turned on them in the mid-2000s.

With the structural features of the banking industry in view, the rest of the story falls into place. Fligstein explains how the crisis was produced, where it spread, why regulators missed the warning signs, and how banks’ dependence on mortgage securitization resulted in predatory lending and securities fraud. An illuminating account of the transformation of the American financial system, The Banks Did It offers important lessons for anyone with a stake in avoiding the next crisis.

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Business Cycles, Indicators, and Forecasting
Edited by James H. Stock and Mark W. Watson
University of Chicago Press, 1993
The inability of forecasters to predict accurately the 1990-1991 recession emphasizes the need for better ways for charting the course of the economy. In this volume, leading economists examine forecasting techniques developed over the past ten years, compare their performance to traditional econometric models, and discuss new methods for forecasting and time series analysis.
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The American Business Cycle
Continuity and Change
Edited by Robert J. Gordon
University of Chicago Press, 1986
In recent decades the American economy has experienced the worst peace-time inflation in its history and the highest unemployment rate since the Great Depression. These circumstances have prompted renewed interest in the concept of business cycles, which Joseph Schumpeter suggested are "like the beat of the heart, of the essence of the organism that displays them."

In The American Business Cycle, some of the most prominent macroeconomics in the United States focuses on the questions, To what extent are business cycles propelled by external shocks? How have post-1946 cycles differed from earlier cycles? And, what are the major factors that contribute to business cycles? They extend their investigation in some areas as far back as 1875 to afford a deeper understanding of both economic history and the most recent economic fluctuations.

Seven papers address specific aspects of economic activity: consumption, investment, inventory change, fiscal policy, monetary behavior, open economy, and the labor market. Five papers focus on aggregate economic activity. In a number of cases, the papers present findings that challenge widely accepted models and assumptions. In addition to its substantive findings, The American Business Cycle includes an appendix containing both the first published history of the NBER business-cycle dating chronology and many previously unpublished historical data series.
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Economic Turbulence
Is a Volatile Economy Good for America?
Clair Brown, John Haltiwanger, and Julia Lane
University of Chicago Press, 2006

Every day, in every sector of our economy, a business shuts down while another starts up, jobs are created while others are cut, and workers are hired while others are laid off. This constant flux, or turbulence, is a defining characteristic of our free market system, yet it mostly inspires angst about unemployment, loss of earnings, and the overall competitiveness of corporations. But is this endless cycle of fluctuation really so bad for America? Might something positive be going on in the economy as a result of it?

In this penetrating work, three esteemed economists seek to answer these questions by exploring the real impact of volatility on American workers and businesses alike. According to the authors, while any number of events--shifts in consumer demand, changes in technology, mergers and acquisitions, or increased competition--can contribute to economic turbulence, our economy as a whole is, by and large, stronger for it, because these processes of creation and destruction make it more flexible and adaptable. The authors also acknowledge and document the adverse consequences of this turbulence on different groups of workers and firms and discuss the resulting policy challenges. Basing their argument on an up-close look into the dealings and practices of five key industries—financial services, retail food services, trucking, semiconductors, and software—the authors demonstrate the positive effects of turbulence on career paths, employee earnings, and firm performance.

The first substantial attempt to disentangle and make clear the complexities of this phenomenon in the United States, Economic Turbulence will be viewed as a major achievement and the centerpiece of any discussion on the subject for years to come.

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Children of the Great Recession
Irwin Garfinkel
Russell Sage Foundation, 2016
Many working families continue to struggle in the aftermath of the Great Recession, the deepest and longest economic downturn since the Great Depression. In Children of the Great Recession, a group of leading scholars draw from a unique study of nearly 5,000 economically and ethnically diverse families in twenty cities to analyze the effects of the Great Recession on parents and young children. By exploring the discrepancies in outcomes between these families—particularly between those headed by parents with college degrees and those without—this timely book shows how the most disadvantaged families have continued to suffer as a result of the Great Recession.
 
Several contributors examine the recession’s impact on the economic well-being of families, including changes to income, poverty levels, and economic insecurity. Irwin Garfinkel and Natasha Pilkauskas find that in cities with high unemployment rates during the recession, incomes for families with a college-educated mother fell by only about 5 percent, whereas families without college degrees experienced income losses three to four times greater. Garfinkel and Pilkauskas also show that the number of non-college-educated families enrolled in federal safety net programs—including Medicaid, the Earned Income Tax Credit, and the Supplemental Nutrition Assistance Program (or food stamps)—grew rapidly in response to the Great Recession.
 
Other researchers examine how parents’ physical and emotional health, relationship stability, and parenting behavior changed over the course of the recession. Janet Currie and Valentina Duque find that while mothers and fathers across all education groups experienced more health problems as a result of the downturn, health disparities by education widened.   Daniel Schneider, Sara McLanahan and Kristin Harknett find decreases in marriage and cohabitation rates among less-educated families, and Ronald Mincy and Elia de la Cruz-Toledo show that as unemployment rates increased, nonresident fathers’ child support payments decreased. William Schneider, Jeanne Brooks-Gunn, and Jane Waldfogel show that fluctuations in unemployment rates negatively affected parenting quality and child well-being, particularly for families where the mother did not have a four-year college degree.
 
Although the recession affected most Americans, Children of the Great Recession reveals how vulnerable parents and children paid a higher price. The research in this volume suggests that policies that boost college access and reinforce the safety net could help protect disadvantaged families in times of economic crisis.
 
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The Great Recession
David B. Grusky
Russell Sage Foundation, 2012
Officially over in 2009, the Great Recession is now generally acknowledged to be the most devastating global economic crisis since the Great Depression. As a result of the crisis, the United States lost more than 7.5 million jobs, and the unemployment rate doubled—peaking at more than 10 percent. The collapse of the housing market and subsequent equity market fluctuations delivered a one-two punch that destroyed trillions of dollars in personal wealth and made many Americans far less financially secure. Still reeling from these early shocks, the U.S. economy will undoubtedly take years to recover. Less clear, however, are the social effects of such economic hardship on a U.S. population accustomed to long periods of prosperity. How are Americans responding to these hard times? The Great Recession is the first authoritative assessment of how the aftershocks of the recession are affecting individuals and families, jobs, earnings and poverty, political and social attitudes, lifestyle and consumption practices, and charitable giving. Focused on individual-level effects rather than institutional causes, The Great Recession turns to leading experts to examine whether the economic aftermath caused by the recession is transforming how Americans live their lives, what they believe in, and the institutions they rely on. Contributors Michael Hout, Asaf Levanon, and Erin Cumberworth show how job loss during the recession—the worst since the 1980s—hit less-educated workers, men, immigrants, and factory and construction workers the hardest. Millions of lost industrial jobs are likely never to be recovered and where new jobs are appearing, they tend to be either high-skill positions or low-wage employment—offering few opportunities for the middle-class. Edward Wolff, Lindsay Owens, and Esra Burak examine the effects of the recession on housing and wealth for the very poor and the very rich. They find that while the richest Americans experienced the greatest absolute wealth loss, their resources enabled them to weather the crisis better than the young families, African Americans, and the middle class, who experienced the most disproportionate loss—including mortgage delinquencies, home foreclosures, and personal bankruptcies. Lane Kenworthy and Lindsay Owens ask whether this recession is producing enduring shifts in public opinion akin to those that followed the Great Depression. Surprisingly, they find no evidence of recession-induced attitude changes toward corporations, the government, perceptions of social justice, or policies aimed at aiding the poor. Similarly, Philip Morgan, Erin Cumberworth, and Christopher Wimer find no major recession effects on marriage, divorce, or cohabitation rates. They do find a decline in fertility rates, as well as increasing numbers of adult children returning home to the family nest—evidence that suggests deep pessimism about recovery. This protracted slump—marked by steep unemployment, profound destruction of wealth, and sluggish consumer activity—will likely continue for years to come, and more pronounced effects may surface down the road. The contributors note that, to date, this crisis has not yet generated broad shifts in lifestyle and attitudes. But by clarifying how the recession’s early impacts have—and have not—influenced our current economic and social landscape, The Great Recession establishes an important benchmark against which to measure future change.
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The American Political Economy
Macroeconomics and Electoral Politics
Douglas A. Hibbs, Jr.
Harvard University Press, 1987

Here is the most comprehensive and authoritative work to date on relationships between the economy and politics in the years from Eisenhower through Reagan. Extending and deepening his earlier work, which had major impact in both political science and economics, Douglas Hibbs traces the patterns in and sources of postwar growth, unemployment, and inflation. He identifies which groups “win” and “lose” from inflations and recessions. He also shows how voters’ perceptions and reactions to economic events affect the electoral fortunes of political parties and presidents.

Hibbs’s analyses demonstrate that political officials in a democratic society ignore the economic interests and demands of their constituents at their peril, because episodes of prosperity and austerity frequently have critical influence on voters’ behavior at the polls. The consequences of Eisenhower’s last recession, of Ford’s unwillingness to stimulate the economy, of Carter’s stalled recovery were electorally fatal, whereas Johnson’s, Nixon’s, and Reagan’s successes in presiding over rising employment and real incomes helped win elections.

The book develops a major theory of macroeconomic policy action that explains why priority is given to growth, unemployment, inflation, and income distribution shifts with changes in partisan control of the White House. The analysis shows how such policy priorities conform to the underlying economic interests and preferences of the governing party’s core political supporters. Throughout the study Hibbs is careful to take account of domestic institutional arrangements and international economic events that constrain domestic policy effectiveness and influence domestic economic outcomes.

Hibbs’s interdisciplinary approach yields more rigorous and more persuasive characterizations of the American political economy than either purely economic, apolitical analyses or purely partisan, politicized accounts. His book provides a useful benchmark for the advocacy of new policies for the 1990s—a handy volume for politicians and their staffs, as well as for students and teachers of politics and economics.

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The Political Economy of Industrial Democracies
Douglas A. Hibbs, Jr.
Harvard University Press, 1987

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House of Debt
How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again
Atif Mian and Amir Sufi
University of Chicago Press, 2014
The Great American Recession resulted in the loss of eight million jobs between 2007 and 2009. More than four million homes were lost to foreclosures. Is it a coincidence that the United States witnessed a dramatic rise in household debt in the years before the recession—that the total amount of debt for American households doubled between 2000 and 2007 to $14 trillion? Definitely not. Armed with clear and powerful evidence, Atif Mian and Amir Sufi reveal in House of Debt how the Great Recession and Great Depression, as well as the current economic malaise in Europe, were caused by a large run-up in household debt followed by a significantly large drop in household spending.

Though the banking crisis captured the public’s attention, Mian and Sufi argue strongly with actual data that current policy is too heavily biased toward protecting banks and creditors. Increasing the flow of credit, they show, is disastrously counterproductive when the fundamental problem is too much debt. As their research shows, excessive household debt leads to foreclosures, causing individuals to spend less and save more. Less spending means less demand for goods, followed by declines in production and huge job losses. How do we end such a cycle? With a direct attack on debt, say Mian and Sufi.  More aggressive debt forgiveness after the crash helps, but as they illustrate, we can be rid of painful bubble-and-bust episodes only if the financial system moves away from its reliance on inflexible debt contracts. As an example, they propose new mortgage contracts that are built on the principle of risk-sharing, a concept that would have prevented the housing bubble from emerging in the first place.

Thoroughly grounded in compelling economic evidence, House of Debt offers convincing answers to some of the most important questions facing the modern economy today: Why do severe recessions happen? Could we have prevented the Great Recession and its consequences? And what actions are needed to prevent such crises going forward?
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House of Debt
How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again
Atif Mian and Amir Sufi
University of Chicago Press, 2014
The Great American Recession resulted in the loss of eight million jobs between 2007 and 2009. More than four million homes were lost to foreclosures. Is it a coincidence that the United States witnessed a dramatic rise in household debt in the years before the recession—that the total amount of debt for American households doubled between 2000 and 2007 to $14 trillion? Definitely not. Armed with clear and powerful evidence, Atif Mian and Amir Sufi reveal in House of Debt how the Great Recession and Great Depression, as well as the current economic malaise in Europe, were caused by a large run-up in household debt followed by a significantly large drop in household spending.

Though the banking crisis captured the public’s attention, Mian and Sufi argue strongly with actual data that current policy is too heavily biased toward protecting banks and creditors. Increasing the flow of credit, they show, is disastrously counterproductive when the fundamental problem is too much debt. As their research shows, excessive household debt leads to foreclosures, causing individuals to spend less and save more. Less spending means less demand for goods, followed by declines in production and huge job losses. How do we end such a cycle? With a direct attack on debt, say Mian and Sufi.  More aggressive debt forgiveness after the crash helps, but as they illustrate, we can be rid of painful bubble-and-bust episodes only if the financial system moves away from its reliance on inflexible debt contracts. As an example, they propose new mortgage contracts that are built on the principle of risk-sharing, a concept that would have prevented the housing bubble from emerging in the first place.

Thoroughly grounded in compelling economic evidence, House of Debt offers convincing answers to some of the most important questions facing the modern economy today: Why do severe recessions happen? Could we have prevented the Great Recession and its consequences? And what actions are needed to prevent such crises going forward?
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Political Business Cycles
The Political Economy of Money, Inflation, and Unemployment
Thomas D. Willett, ed.
Duke University Press, 1988
The "political business cycle", according to economist William Nordhaus, creates a situation in which political and bureaucratic incentives create artificial economic booms just before elections, with consequent and deleterious side effects after the ballots are counted. This work examines the issue of whether federal governmental structure inevitably leaves the U.S. economy exposed to unhealthy political influences.
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Nevada's Great Recession
Looking Back, Moving Forward
Elliott Parker
University of Nevada Press, 2017
Of all economic recessions experienced by the United States in the postwar period, the Great Recession that began in 2008 was the deepest, longest, and most destructive. Nevada was among the hardest hit states, its people reeling from the aftereffects, and the state government also experiencing a severe fiscal crisis. University of Nevada economics professor Elliott Parker and then-State Treasurer Kate Marshall make sense of what went wrong and why, with the hope the state will learn lessons to prevent past mistakes from being made again.
 
This is a different kind of economics book. Parker uses his expertise from doing research on the East Asian fiscal crisis to give profound insights into what happened and how to avoid future catastrophes. Marshall personalizes it by providing vignettes of what it was actually like to be in the trenches and fighting the inevitable political battles that came up, and counteracting some of the falsehoods that certain politicians were spreading about the recession.
 
Parker and Marshall’s book should be required reading for not only every single elected official in Nevada, but for any private citizen who cares about the public good.
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Getting Rich in Late Antique Egypt
Ryan E. McConnell
University of Michigan Press, 2017
Papyrologists and historians have taken a lively interest in the Apion family (fifth through seventh centuries), who rose from local prominence in rural Middle Egypt to become one of the wealthiest and most powerful families in the Eastern Roman Empire. The focus of most scholarly debate has been whether the Apion estate—and estates like it—aimed for a marketable surplus or for self-sufficiency. Getting Rich in Late Antique Egypt shifts the discussion to precisely how the Apions’ wealth was generated and what role their Egyptian estate played in that growth by engaging directly with broader questions of the relationship between public and private economic actors in Late Antiquity, rational management in ancient economies, the size of estates in Byzantine Egypt, and the role of rural estates in the Byzantine economy.
           
Ryan E. McConnell connects the family’s rise in wealth and status to its role in tax collection on behalf of the Byzantine state, rather than a reliance on productive surpluses. Close analysis of low- and high-level accounts from the Apion estate, as well as documentation from comparable Roman and Byzantine Egyptian estates, corroborate this conclusion. Additionally, McConnell offers a third way into the ongoing debate over whether the Apions’ relationship with the state was antagonistic or cooperative, concluding that the relationship was that of parties in a negotiation, with each side seeking to maximize its own benefit. The application of modern economic concepts—as well as comparisons to the economies of Athens, Rome, Ptolemaic Egypt, and Early Modern France—further illuminate the structure and function of the estate in Late Antique Egypt.

Getting Rich in Late Antique Egypt will be a valuable resource for philologists, archaeologists, papyrologists, and scholars of Late Antiquity. It will also interest scholars of agricultural, social, and economic history.


 
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Roman Corinth
An Alternative Model for the Classical City
Donald Engels
University of Chicago Press, 1990
In the second century A.D., Corinth was the largest city in Roman Greece. A center of learning, culture, and commerce, it served as the capital of the senatorial province of Achaea and was the focus of apostle Paul's missionary activity. Donald Engels's important revisionist study of this ancient urban area is at once a detailed history of the Roman colony and a provocative socioeconomic analysis. With Corinth as an exemplar, Engels challenges the widely held view that large classical cities were consumer cities, innocent of the market forces that shape modern economies. Instead, he presents an alternative model—the "service city."

Examining a wealth of archaelogical and literary evidence in light of central place theory, and using sound statistical techniques, Engels reconstructs the human geography of the Corinthia, including an estimate of the population. He shows that—given the amount of cultivatable land—rents and taxes levied onthe countryside could not have supported a highly populated city like Corinth. Neither could its inhabitants have supported themselves directly by farming.

Rather, the city constituted a thriving market for domestic, regional, and overseas raw materials, agricultural products, and manufactured goods, at the same time satisfying the needs of those who plied the various land and sea routes that converged there. Corinth provided key governmental and judicial services to the province of Achaea, and its religious festivals, temples, and monuments attracted numerous visitors from all corners of the Roman world. In accounting for the large portion of residents who participated in these various areas outside of the traditional consumer model, Engels reveals the depth and sophistication of the economics of ancient cities.

Roman Corinth is a much-needed critique of the currently dominant approach of ancient urbanism. It will be of crucial interest to scholars and students in classics, ancient history, and urban studies.
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Making Money in Ancient Athens
Michael Leese
University of Michigan Press, 2021

Given their cultural, intellectual, and scientific achievements, surely the Greeks were able to approach their economic affairs in a rational manner like modern individuals? Since the nineteenth century, many scholars have argued that premodern people did not behave like modern businesspeople, and that the “stagnation” that characterized the economy prior to the Industrial Revolution can be explained by a prevailing noneconomic mentality throughout premodern (and nonwestern) societies. This view, which simultaneously extols the “sophistication” of the modern West, relegates all other civilizations to the status of economic backwardness.

But the evidence from ancient Athens, which is one of the best-documented societies in the premodern world, tells a very different story: one of progress, innovation, and rational economic strategies. Making Money in Ancient Athens examines in the most comprehensive manner possible the voluminous source material that has survived from Athens in inscriptions, private lawsuit speeches, and the works of philosophers like Aristotle and Plato. Inheritance cases that detail estate composition and investment choices, and maritime trade deals gone wrong, provide unparalleled glimpses into the specific factors that influenced Athenians at the level of the economic decision-making process itself, and the motivations that guided the specific economic transactions attested in the source material. Armed with some of the most thoroughly documented case studies and the richest variety of source material from the ancient Greek world, Michael Leese argues that the evidence overwhelmingly demonstrates that ancient Athenians achieved the type of long-term profit and wealth maximization and continuous reinvestment of profits into additional productive enterprise that have been argued as unique to (and therefore responsible for) the modern industrial-capitalist system.
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Economics and World History
Myths and Paradoxes
Paul Bairoch
University of Chicago Press, 1993
Paul Bairoch sets the record straight on twenty commonly held myths about economic history. Among these are that free trade and population growth have historically led to periods of economic growth; that a move away from free trade caused the Great Depression; and that colonial powers in the nineteenth and early twentieth centuries became rich through the exploitation of the Third World. Bairoch argues that these beliefs are based on insufficient knowledge and misguided interpretations of the economic history of the United States, Europe, and the Third World.

"A challenging and readable introduction to some major controversial themes in modern international economic history."—Peter J. Cain, International History Review

"Paul Bairoch sheds fascinating light on many of the accepted truths of modern economic history: an intriguing account, well executed."—Alfred L. Malabre, Jr., Economics Editor, Wall Street Journal
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Economic Growth of Nations
Total Output and Production Structure
Simon Kuznets
Harvard University Press, 1971
In the seven chapters presented here noted economist and Nobel Prize–winner Simon Kuznets summarizes the results of his studies of the economic growth of nations in modern times. Working over the last twenty years, he has concerned himself largely with national product and its components—with long-term trends in growth in total output and in labor force changes in production structure. Such comprehensive data, Kuznets maintains, in which significantly different elements are distinguished and measured, are indispensable both for observations and analysis of the essentially quantitative process of economic growth and for the search for the general and variant characteristics of this growth. He covers a variety of countries and is able to suggest valid general characteristics and test the limits within which they hold. He also provides comparisons between the economically developed and the less developed countries and evaluates the relation between per capita product and the structure of production and the movements of both over time in the course of modern economic growth.
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Bourgeois Dignity
Why Economics Can't Explain the Modern World
Deirdre Nansen McCloskey
University of Chicago Press, 2010

The big economic story of our times is not the Great Recession. It is how China and India began to embrace neoliberal ideas of economics and attributed a sense of dignity and liberty to the bourgeoisie they had denied for so long. The result was an explosion in economic growth and proof that economic change depends less on foreign trade, investment, or material causes, and a whole lot more on ideas and what people believe.

Or so says Deirdre N. McCloskey in Bourgeois Dignity, a fiercely contrarian history that wages a similar argument about economics in the West. Here she turns her attention to seventeenth- and eighteenth-century Europe to reconsider the birth of the industrial revolution and the rise of capitalism. According to McCloskey, our modern world was not the product of new markets and innovations, but rather the result of shifting opinions about them. During this time, talk of private property, commerce, and even the bourgeoisie itself radically altered, becoming far more approving and flying in the face of prejudices several millennia old. The wealth of nations, then, didn’t grow so dramatically because of economic factors: it grew because rhetoric about markets and free enterprise finally became enthusiastic and encouraging of their inherent dignity.

An utterly fascinating sequel to her critically acclaimed book The Bourgeois Virtues, Bourgeois Dignity is a feast of intellectual riches from one of our most spirited and ambitious historians—a work that will forever change our understanding of how the power of persuasion shapes our economic lives.

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Leave Me Alone and I'll Make You Rich
How the Bourgeois Deal Enriched the World
Deirdre Nansen McCloskey and Art Carden
University of Chicago Press, 2020
The economist and historian Deirdre Nansen McCloskey has been best known recently for her Bourgeois Era trilogy, a vigorous defense, unrivaled in scope, of commercially tested betterment.  Its massive volumes, The Bourgeois Virtues, Bourgeois Dignity, and Bourgeois Equality, solve Adam Smith’s puzzle of the nature and causes of the wealth of nations, and of the moral sentiments of modernity.   The world got rich, she argues, not chiefly by material causes but by an idea and a sentiment, a new admiration for the middle class and its egalitarian liberalism.  

For readers looking for a distillation of McCloskey’s magisterial work, Leave Me Alone and I’ll Make You Rich is what you’ve been waiting for. In this lively volume, McCloskey and the economist and journalist Carden bring together the trilogy’s key ideas and its most provocative arguments. The rise of the west, and now the rest, is the story of the rise of ordinary people to a dignity and liberty inspiring them to have a go. The outcome was an explosion of innovation after 1800, and a rise of real income by an astounding 3,000 percent.  The Great Enrichment, well beyond the conventional Industrial Revolution, did not, McCloskey and Carden show, come from the usual suspects, capital accumulation or class struggle.  It came from the idea of economic liberty in Holland and the Anglosphere, then Sweden and Japan, then Italy and  Israel and China and India, an idea that bids fair in the next few generations to raise up the wretched of the earth.  The original shift to liberalism arose from 1517 to 1789 from theological and political revolutions in northwest Europe, upending ancient hierarchies.  McCloskey and Carden contend further that liberalism and “innovism” made us better humans as well as richer ones.  Not matter but ideas.  Not corruption but improvement.

Leave Me Alone and I’ll Make You Rich draws in entertaining fashion on history, economics, literature, philosophy, and popular culture, from growth theory to the Simpsons. It is the perfect introduction for a broad audience to McCloskey’s influential explanation of how we got rich.  At a time when confidence in the economic system is under challenge, the book mounts an optimistic and persuasive defense of liberal innovism, and of the modern world it has wrought.
 
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The World Economy
History & Prospect
By W. W. Rostow
University of Texas Press, 1978

This monumental study is an account of the world economy from the eighteenth century to the twentieth, an analysis and prescription for the future, and a challenge to the neo-Keynesian theories of income determination and growth. It is based on some forty years of research and teaching.

Originally published in 1978, the volume looks back over the nineteenth and twentieth centuries. It includes an analysis of how the world's population expanded from about 1 billion in 1800 to 4 billion in 1976, with some 6.5 billion in sight for the year 2000; an account of the expansion and distribution of industrial production and trade during this period; and an analysis of price and relative price movements since the eighteenth century. Rostow gives a detailed description of the Kondratieff long cycles in the relative scarcity and abundance of food and raw materials and reasons that the world economy entered the fifth Kondratieff upswing at the close of 1972. He also examines the changing pattern of business cycles over the whole sweep of modern economic growth and the failure of the post-1945 world economy to control inflation. The volume also includes short economic histories of twenty national economies responsible for 80 percent of the world's production, based on a collection of computerized aggregate and sectoral data.

Each historical section leads naturally into one or more of the major problems dealt with in the final portion of the book, which looks to the future of the world economy: food, population, energy, raw materials, the environment, and the tasks of national and international policy. Rostow argued, counter to the Limits to Growth doctrine, that the critical period for industrial civilization lay in the last twenty-five years of the twentieth century, rather than in the twenty-first century, and that what we did or failed to do in that generation would determine the shape of the longer future.

No other economic history of this depth and breadth exists. It is a reference for economists, economic historians, and other social scientists as well as the informed lay reader.

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The Age of Equality
The Twentieth Century in Economic Perspective
Richard Pomfret
Harvard University Press, 2011

In 1900 the global average life expectancy at birth was thirty-one years. By 2000 it was sixty-six. Yet, alongside unprecedented improvements in longevity and material well-being, the twentieth century also saw the rise of fascism and communism and a second world war followed by a cold war. This book tells the story of the battles between economic systems that defined the last century and created today's world.

The nineteenth century was a period of rapid economic growth characterized by relatively open markets and more personal liberty, but it also brought great inequality within and between nations. The following century offered sharp challenges to free-wheeling capitalism from both communism and fascism, whose competing visions of planned economic development attracted millions of people buffeted by the economic storms of the 1930s. The Age of Equality describes the ways in which market-oriented economies eventually overcame the threat of these visions and provided a blueprint for reform in nonmarket economies. This was achieved not through unbridled capitalism but by combining the efficiency and growth potential of markets with government policies to promote greater equality of opportunity and outcome. Following on the heels of economic reform, rapid catch-up growth in countries such as China, India, Indonesia, Brazil, and Poland helped to reduce global inequality.

At a time when inequality is on the rise in nations as disparate as the United States and Egypt, Pomfret’s interpretation of how governments of market economies faced the challenges of the twentieth century is both instructive and cautionary.

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Toward a New Iron Age?
Quantitative Modeling of Resource Exhaustion
Robert B. Gordon, Tjalling C. Koopmans, William D. Nordhaus, and Brian J. Skinner
Harvard University Press, 1987

Experts agree that the earth will eventually run out of certain low-cost, nonrenewable resources, possibly as early as a century from now. Will the transition to reliance on other, more abundant resources be smooth or discontinuous? Might industrial societies experience a marked decline in living standards—a radically different kind of society from the one we now know? Geologists maintain that once inexpensive high-grade resources are exhausted, economic growth will slow. Economists are more optimistic: they believe that new technologies and materials will be substituted rapidly enough to prevent minor economic dislocations.

Toward a New Iron Age? takes an important step toward reconciling these divergent views. It is the most comprehensive study of the economic consequences of resource depletion—in particular, it is a thorough exploration of the prospects for one key metal, copper. The authors draw on geological and engineering data to calculate the resources now available and to assess the feasibility of substituting alternatives. Using linear programming and a range of hypothetical base conditions, they are able to estimate the course, through the next century and beyond, of several crucial factors: the rate at which copper resources will be used and when they will be depleted; how the price of the metal will fluctuate; when alternative materials will be substituted, in what patterns, and at what costs. By the late twenty-first century, the authors believe, low-cost copper will no longer be available. Industrial societies will have to operate on more abundant resources such as iron, silica, and aluminum. They will enter, in short, a New Iron Age.

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Globalization and Its Discontents
The Rise of Postmodern Socialisms
Edited by Roger Burbach, Boris Kagarlitsky, and Orlando Nunez
Pluto Press, 1997

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Capital Resurgent
Roots of the Neoliberal Revolution
Gérard Duménil and Dominique Lévy
Harvard University Press, 2004

The advent of economic neoliberalism in the 1980s triggered a shift in the world economy. In the three decades following World War II, now considered a golden age of capitalism, economic growth was high and income inequality decreasing. But in the mid-1970s this social compact was broken as the world economy entered the stagflation crisis, following a decline in the profitability of capital. This crisis opened a new phase of stagnating growth and wages, and unemployment. Interest rates as well as dividend flows rose, and income inequality widened.

Economists Gérard Duménil and Dominique Lévy show that, despite free market platitudes, neoliberalism was a planned effort by financial interests against the postwar Keynesian compromise. The cluster of neoliberal policies--including privatization, liberalization of world trade, and reduction in state welfare benefits--is an expression of the power of finance in the world economy.

The sequence of events initiated by neoliberalism was not unprecedented. In the late nineteenth century, when economic conditions were similar to those of the 1970s, a structural crisis led to the first financial hegemony culminating in the speculative boom of the late 1920s. The authors argue persuasively for stabilizing the world economy before we run headlong into another economic disaster.

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Which World?
Scenarios For The 21St Century
Allen Hammond
Island Press, 1998
In Which World?, scientist Allen Hammond imaginatively probes the consequences of present social, economic, and environmental trends to construct three possible worlds that could await us in the twenty-first century: Market World, in which economic and human progress is driven by the liberating power of free markets and human initiative; Fortress World, in which unattended social and environmental problems diminish progress, dooming hundreds of millions of humans to lives of rising conflict and violence; and Transformed World, in which human ingenuity and compassion succeed in offering a better life, not just a wealthier one, and in seeking to extend those benefits to all of humanity.
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Leading Questions
How Hegemony Affects the International Political Economy
Robert Pahre
University of Michigan Press, 1999
Leadership has long been an important subject in the study of international economic relations. Many scholars give American leadership credit for strong economic growth in western Europe and Japan after World War II. Other scholars have accused leading nations of using their power to the detriment of foreign countries. For example, it is often argued that a failure of both British and American leadership was a cause of the Great Depression of the 1930s.
In Leading Questions, Robert Pahre develops a series of formal models to determine under what conditions leadership will be beneficial or harmful for the international political economy. He begins with a simple model of collective action and then adds leadership, security concerns, cooperation, and multilateral regimes to this basic model. He tests each model against a different historical period between 1815 and 1967.
Pahre's findings challenge conventional wisdom on international leadership. He finds that a leading state harms others when it has many allies but is good for the international political economy when it lacks allies. Leaders are less likely to engage in international cooperation than are other states, but having a leader in the system makes cooperation among follower states more likely. Cooperation by others may cause the leader to join a system of multilateral cooperation.
Pahre presents the technical material in an accessible style. By challenging the conventional interpretations of political economy in several historical periods, Leading Questions will be of interest not only to political scientists but also to economists and historians.
Robert Pahre is Associate Professor of Political Science, University of Illinois at Urbana-Champaign.
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Resilience Practice
Building Capacity to Absorb Disturbance and Maintain Function
Brian Walker and David Salt
Island Press, 2012
In 2006, Resilience Thinking addressed an essential question: As the natural systems that sustain us are subjected to shock after shock, how much can they take and still deliver the services we need from them? This idea caught the attention of both the scientific community and the general public.

In Resilience Practice, authors Brian Walker and David Salt take the notion of resilience one step further, applying resilience thinking to real-world situations and exploring how systems can be managed to promote and sustain resilience.

The book begins with an overview and introduction to resilience thinking and then takes the reader through the process of describing systems, assessing their resilience, and intervening as appropriate. Following each chapter is a case study of a different type of social-ecological system and how resilience makes a difference to that system in practice. The final chapters explore resilience in other arenas, including on a global scale.
 
Resilience Practice will help people with an interest in the “coping capacity” of systems—from farms and catchments to regions and nations—to better understand how resilience thinking can be put into practice. It offers an easy-to-read but scientifically robust guide through the real-world application of the concept of resilience and is a must read for anyone concerned with the management of systems at any scale.
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Resilience Thinking
Sustaining Ecosystems and People in a Changing World
Brian Walker and David Salt; Foreword by Walter V. Reid
Island Press, 2006
Increasingly, cracks are appearing in the capacity of communities, ecosystems, and landscapes to provide the goods and services that sustain our planet's well-being. The response from most quarters has been for "more of the same" that created the situation in the first place: more control, more intensification, and greater efficiency.

"Resilience thinking" offers a different way of understanding the world and a new approach to managing resources. It embraces human and natural systems as complex entities continually adapting through cycles of change, and seeks to understand the qualities of a system that must be maintained or enhanced in order to achieve sustainability. It explains why greater efficiency by itself cannot solve resource problems and offers a constructive alternative that opens up options rather than closing them down.

In Resilience Thinking, scientist Brian Walker and science writer David Salt present an accessible introduction to the emerging paradigm of resilience. The book arose out of appeals from colleagues in science and industry for a plainly written account of what resilience is all about and how a resilience approach differs from current practices. Rather than complicated theory, the book offers a conceptual overview along with five case studies of resilience thinking in the real world. It is an engaging and important work for anyone interested in managing risk in a complex world.
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Bleakonomics
A Heartwarming Introduction to Financial Catastrophe, the Jobs Crisis and Environmental Destruction
Rob Larson
Pluto Press, 2012
Bleakonomics is a short and darkly humorous guide to the three great crises plaguing today's world: environmental degradation, social conflict in the age of austerity and financial instability.

Written for anyone who is wondering how we’ve come to this point, Rob Larson holds mainstream economic theory up against the grim reality of a planet in meltdown. He looks at scientists’ conclusions about climate change, the business world’s opinions about its own power, and reveals the fingerprints of finance on American elections.

With a unique and engaging approach to each crucial subject, students, academics and activists will find a lot to appreciate in this quiet call-to-arms for a saner and more stable world.
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Natural Resource Policymaking in Developing Countries
Environment, Economic Growth, and Income Distribution
William L. Ascher and Robert Healy
Duke University Press, 1990
Drawing on case studies developed over a two-year period, 1987–1989, by Fellows in the Program in International Development Policy at Duke University, including experienced representatives from developing countries, the World Bank, and scholars, the authors integrate the growing interest in environmental protection and resource conservation into the existing body of knowledge about the political economy of developing countries.
This book is about the links that tie resource use, environmental quality, and economic development, and the way in which those links are affected by the distribution of income and resource ownership. The links may be relatively simple, as in the case of peasant farmers too poor to conserve resources for the future and with nothing to gain from sound environmental practices. Or they may be very complex—as the authors find when they demonstrate how achievement of higher incomes by the rich can increase environmentally destructive behavior by the poor. Many of the links in some way involve rural land use, whether for agriculture or forestry. Natural Resource Policymaking in Developing Countries argues that the policies that matter are not merely those dealing with resources and the environment, but a much broader set that includes income distribution and asset ownership.
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The Development Frontier
Essays in Applied Economics
P. T. Bauer
Harvard University Press, 1991

P. T. Bauer is a pioneer: from the outset his studies and reflections about economic development led him to conclusions that diverge from the mainstream. The Development Frontier illustrates his characteristic approach, in which economic analysis is allied with careful observation of the economic scene and economic processes in the less developed world. The book is further enriched by his understanding of the interplay between social and political factors and forces conventionally regarded as falling within the purview of economics.

One of Bauer's central themes is the crucial importance of traders in transforming subsistence and near-subsistence economies into exchange economies. In contrast to the conventional view that traders are parasitic, Bauer views them as productive: they encourage new wants, convey information about new opportunities, and help producers take advantage of these opportunities. Other major topics include internal trade in less developed countries, occupational distribution and economic advance, Third World debt, price and income stabilization of primary producers, and official resource transfers (foreign aid).

Bauer presents arresting insights and graphic illustrations. He challenges the preconceptions and attitudes of nonspecialists and specialists alike, whether he is writing about the role of traders, the population explosion, Hong Kong, or the views of the late Sir John Hicks on economic history.

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Money and Power
Great Predators in the Political Economy of Development
Sarah Bracking
Pluto Press, 2009

Sarah Bracking explores the role of governments and development finance institutions in managing the markets in which the poorest countries operate. These institutions -- the 'Great Predators' -- are trapping the populations of the south in a permanent cycle of austerity.

Bracking examines the political economy relations between states. She shows how pseudo-public 'development' institutions retain complete economic control over Southern markets, yet the international system is itself unregulated. Operating in the interests of North America and the European Union, they have a political purpose, and yet serve to cloud the brute power relations between states.

This book will be of interest to anyone studying debt and development, global financial institutions, and the way the world economy is regulated and governed.

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