● Open Secret: The Global Banking Conspiracy That Swindled Investors Out of Billions
By Erin Arvedlund
Summary via publisher (Portfolio)
In the midst of the financial crisis of 2008, rumors swirled that a sinister scandal was brewing deep in the heart of London. Some suspected that behind closed doors, a group of chummy young bankers had been cheating the system through interest rate machinations. But with most eyes focused on the crisis rippling through Wall Street and the rest of the world, the story remained an “open secret” among competitors…. Now Erin Arvedlund, the bestselling author of Too Good to Be True, reveals how this global network created and perpetuated a multiyear scam against the financial system. She uncovers how the corrupt practice of altering the key interest rate occurred through an unregulated and informal honor system, in which young masters of the universe played fast and loose, while their more seasoned bosses looked the other way (and would later escape much of the blame). It was a classic private understanding among a small group of competitors—you scratch my back today, I’ll scratch yours tomorrow.
● Trillion Dollar Economists: How Economists and Their Ideas have Transformed Business
By Robert Litan
Summary via publisher (Bloomberg/Wiley)
Trillion Dollar Economists explores the prize-winning ideas that have shaped business decisions, business models, and government policies, expanding the popular idea of the economist’s role from one of forecaster to one of innovator. Written by the former Director of Economic Research at Bloomberg Government, the Kauffman Foundation and the Brookings Institution, this book describes the ways in which economists have helped shape the world – in some cases, dramatically enough to be recognized with a Nobel Prize or Clark Medal. Detailed discussion of how economists think about the world and the pace of future innovation leads to an examination of the role, importance, and limits of the market, and economists’ contributions to business and policy in the past, present, and future.
● Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World
By Jeff Madrick
Review via The New York Times (Paul Krugman)
The economics profession has not, to say the least, covered itself in glory these past six years. Hardly any economists predicted the 2008 crisis — and the handful who did tended to be people who also predicted crises that didn’t happen. More significant, many and arguably most economists were claiming, right up to the moment of collapse, that nothing like this could even happen.
Furthermore, once crisis struck economists seemed unable to agree on a response. They’d had 75 years since the Great Depression to figure out what to do if something similar happened again, but the profession was utterly divided when the moment of truth arrived.
In “Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World,” Jeff Madrick — a contributing editor at Harper’s Magazine and a frequent writer on matters economic — argues that the professional failures since 2008 didn’t come out of the blue but were rooted in decades of intellectual malfeasance.
● The Global Republic: America’s Inadvertent Rise to World Power
By Frank Ninkovich
Summary via publisher (Chicago Unviversity Press)
For decades the United States has been the most dominant player on the world’s stage. The country’s economic authority, its globally forceful foreign policy, and its leading position in international institutions tend to be seen as the result of a long-standing, deliberate drive to become a major global force. Furthermore, it has become widely accepted that American exceptionalism—the belief that America is a country like no other in history—has been at the root of many of the country’s political, military, and global moves. Frank Ninkovich disagrees…. He argues that historically the United States has been driven not by a belief in its destiny or its special character but rather by a need to survive the forces of globalization. He builds the powerful case that American foreign policy has long been based on and entangled in questions of global engagement, while also showing that globalization itself has always been distinct from—and sometimes in direct conflict with—what we call international society.
● Portfolio Theory and Risk Management (Mastering Mathematical Finance)
By Maciej J. Capiński and Ekkehard Kopp
Summary via publisher (Cambridge University Press)
With its emphasis on examples, exercises and calculations, this book suits advanced undergraduates as well as postgraduates and practitioners. It provides a clear treatment of the scope and limitations of mean-variance portfolio theory and introduces popular modern risk measures. Proofs are given in detail, assuming only modest mathematical background, but with attention to clarity and rigour. The discussion of VaR and its more robust generalizations, such as AVaR, brings recent developments in risk measures within range of some undergraduate courses and includes a novel discussion of reducing VaR and AVaR by means of hedging techniques. A moderate pace, careful motivation and more than 70 exercises give students confidence in handling risk assessments in modern finance.