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How Markets Fail: The Logic of Economic…

How Markets Fail: The Logic of Economic Calamities

by John Cassidy

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Showing 1-5 of 6 (next | show all)
For authors who write for the general public: brevity and presenting complex ideas in simple ways are a virtue. This author hadn't those virtues. Had to give up half way in. ( )
  lente | Dec 6, 2015 |
Excellent. Thorough overview of the field of economics, from Adam Smith through JS Mill, Keynes and Hayek, Friedman, to the current financial collapse. Argues for a pragmatic approach, with the full acknowledgment that market failure exists, and that there is no invisible hand when it comes to the financial markets. The real joy for me comes in learning all sorts of things about economists I'd not really heard anything about, such as Arrow, Akerlof, and Minsky. It predates the Occupy movement, written in 2009, and it's late enough that you can see that Wall Street didn't learn a damn thing from the recent financial crisis.
4 stars oc ( )
  starcat | Aug 11, 2014 |
Superb critical account of all that is wrong with economics and the economic system. Very clear and wide ranging. ( )
  xander_paul | Feb 4, 2014 |
sort of a history of economics (only as far as Adam Smith) - will need to interloan in the future ( )
  lindap69 | Apr 5, 2013 |
The best introductory explanation of two major theories of economy - Keynes vs Freedman - and how it all played out in a recent financial crisis. The author is very convincing even though he is definitely on the liberal side (for me). There is no question that government should be involved in regulation of the economy in general, and financial regulations in particular - but there is a fine line. The author acknowledges this line but completely omits discussion regarding it, dangers of too extensive government intervention and how to avoid it. As of financial crisis, the author acknowledges the role played in this crisis by the government through Fannie/Freddie mortgage purchasing/guarantees. However, he seems to dismiss the idea that such involvement was a critical, even crucial factor. I wonder how it would all develop without push from the US government to encourage as many mortgages as possible. Given such government role in the crisis, I believe it's impossible to argue that private sector alone caused it. Anyway, the book is extremely well written and gives a lot to think about. ( )
  everfresh1 | Apr 25, 2012 |
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A common reaction to extreme events is to say that they couldn't have been predicted.
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Amazon.com Product Description (ISBN 0374173206, Hardcover)

Behind the alarming headlines about job losses, bank bailouts, and corporate greed is a little-known story of bad ideas. For fifty years or more, economists have been busy developing elegant theories of how markets work—how they facilitate innovation, wealth creation, and an efficient allocation of society’s resources. But what about when markets don’t work? What about when they lead to stock market bubbles, glaring inequality, polluted rivers, real estate crashes, and credit crunches?

In How Markets Fail, John Cassidy describes the rising influence of what he calls utopian economics—thinking that is blind to how real people act and that denies the many ways an unregulated free market can produce disastrous unintended consequences. He then looks to the leading edge of economic theory, including behavioral economics, to offer a new understanding of the economy—one that casts aside the old assumption that people and firms make decisions purely on the basis of rational self-interest. Taking the global financial crisis and current recession as his starting point, Cassidy explores a world in which everybody is connected and social contagion is the norm. In such an environment, he shows, individual behavioral biases and kinks—overconfidence, envy, copycat behavior, and myopia—often give rise to troubling macroeconomic phenomena, such as oil price spikes, CEO greed cycles, and boom-and-bust waves in the housing market. These are the inevitable outcomes of what Cassidy refers to as “rational irrationality”—self-serving behavior in a modern market setting.

Combining on-the-ground reporting, clear explanations of esoteric economic theories, and even a little crystal-ball gazing, Cassidy warns that in today’s economic crisis, conforming to antiquated orthodoxies isn’t just misguided—it’s downright dangerous. How Markets Fail offers a new, enlightening way to understand the force of the irrational in our volatile global economy.

(retrieved from Amazon Thu, 12 Mar 2015 17:58:13 -0400)

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A critical assessment of the economic orthodoxies behind the current global financial crisis examines the growing field of behavioral economics to identify the interconnectedness of the world and how it gives way to price spikes and boom-and-bust cycles.… (more)

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