Book Bits | 17 November 2018

Money and Government: The Past and Future of Economics
By Robert Skidelsky
Summary via publisher (Yale University Press)
The dominant view in economics is that money and government should play only minor roles in economic life. Economic outcomes, it is claimed, are best left to the “invisible hand” of the market. Yet these claims remain staunchly unsettled. The view taken in this important new book is that the omnipresence of uncertainty makes money and government essential features of any market economy. Since Adam Smith, classical economics has espoused non-intervention in markets. The Great Depression brought Keynesian economics to the fore; but stagflation in the 1970s brought a return to small-state orthodoxy. The 2008 global financial crash should have brought a reevaluation of that stance; instead the response has been punishing austerity and anemic recovery. This book aims to reintroduce Keynes’s central insights to a new generation of economists, and embolden them to return money and government to the starring roles in the economic drama that they deserve.

Dark Commerce: How a New Illicit Economy Is Threatening Our Future
By Louise I. Shelley
Interview with author via The Crime Report
Q: How did illicit trade grow to the magnitude that we see today?
A: Illicit trade has been growing exponentially in the last 30 years in part because of the rise of new technology. The fact that most of the world’s population is now connected to cell phones, and to the internet, has fueled illicit trade in rural areas that used to be inaccessible. For example, a third of rural India is now using illegal pesticides, purchasing the goods through the Internet and cell phones, and directly affecting the health and food supply of the people. These counterfeit harmful products have shown up in the most remote areas of the world. If you look at the history of illicit trade, it was in ports and big cities; it was along rivers. Now, with transport links and communications, it’s everywhere.

America, Compromised
By Lawrence Lessig
Summary via publisher (University of Chicago Press)
“There is not a single American awake to the world who is comfortable with the way things are.”
So begins Lawrence Lessig’s sweeping indictment of contemporary American institutions and the corruption that besets them. We can all see it—from the selling of Congress to special interests to the corporate capture of the academy. Something is wrong. It’s getting worse.

The Once and Future Worker: A Vision for the Renewal of Work in America
By Oren Cass
Interview with author via American Enterprise Institute
This week on Banter, Manhattan Institute Senior Fellow Oren Cass joins the show to discuss his new book “The Once and Future Worker: A Vision for the Renewal of Work in America.” The book encourages policymakers and the public to rethink the decades-long economic consensus that prioritized increased consumption. Cass argues for a new way of thinking that values production and provides opportunities for American workers to support their families and communities. Cass participated in an AEI public event alongside the Brookings Institution’s Isabel Sawhill and IBM’s Stanley Litow on work, skills, and mobility in late October.

Kickback: Exposing the Global Corporate Bribery Network
By David Montero
Review via Kirkus Review
In his debut book, investigative journalist Montero, a former Christian Science Monitor correspondent and Frontline producer, peels back layers of corruption to uncover the secret network of bribery and intimidation that exists among many of the world’s largest corporations and the public officials who profit from their misconduct. Culled from a mix of court records, leaked confidential documents, and personal interviews, the book details how corporate payoffs contributed to the regime of Saddam Hussein, the economic collapse of Greece, and other instances of national governments selling out their constituents to the highest bidder.

Taming Japan’s Deflation: The Debate over Unconventional Monetary Policy
By Gene Park, et al.
Summary via publisher (Cornell University Press)
Bolder economic policy could have addressed the persistent bouts of deflation in post-bubble Japan, write Gene Park, Saori N. Katada, Giacomo Chiozza, and Yoshiko Kojo in Taming Japan’s Deflation. Despite warnings from economists, intense political pressure, and well-articulated unconventional policy options to address this problem, Japan’s central bank, the Bank of Japan (BOJ), resisted taking the bold actions that the authors believe would have significantly helped. With Prime Minister Abe Shinzo’s return to power, Japan finally shifted course at the start of 2013 with the launch of Abenomics—an economic agenda to reflate the economy—and Abe’s appointment of new leadership at the BOJ. As Taming Japan’s Deflation shows, the BOJ’s resistance to experimenting with bolder policy stemmed from entrenched policy ideas that were hostile to activist monetary policy. The authors explain how these policy ideas evolved over the course of the BOJ’s long history and gained dominance because of the closed nature of the broader policy network.

Volatility Master Class for Quants
By Bruno Dupire
Summary via Amazon
Volatility presents a fascinating insight into a key area of modern finance, authored by one of its original pioneers. Building on twenty years of extensive practice and theory, the book presents models and ideas from financial engineering for those who trade themselves or create models for traders. Author Bruno Dupire’s concise examination of key volatility topics offers readers the best in cutting-edge information and is designed to be fully accessible to anyone dealing with volatility, from quantitative analysts to traders, from risk managers to academics. Bridging cultural gaps, the book presents information from a practical perspective alongside the concepts needed to fully understand this fascinating topic.

Digital Renaissance: What Data and Economics Tell Us about the Future of Popular Culture
By Joel Waldfogel
Summary via publisher (Princeton University Press)
The digital revolution poses a mortal threat to the major creative industries—music, publishing, television, and the movies. The ease with which digital files can be copied and distributed has unleashed a wave of piracy with disastrous effects on revenue. Cheap, easy self-publishing is eroding the position of these gatekeepers and guardians of culture. Does this revolution herald the collapse of culture, as some commentators claim? Far from it. In Digital Renaissance, Joel Waldfogel argues that digital technology is enabling a new golden age of popular culture, a veritable digital renaissance.

Quantitative Financial Risk Management
Michael B. Miller
Summary via publisher (Wiley)
Our modern economy depends on financial markets. Yet financial markets continue to grow in size and complexity. As a result, the management of financial risk has never been more important. Quantitative Financial Risk Management introduces students and risk professionals to financial risk management with an emphasis on financial models and mathematical techniques. Each chapter provides numerous sample problems and end of chapter questions. The book provides clear examples of how these models are used in practice and encourages readers to think about the limits and appropriate use of financial models.