Book Bits: 3 December 2022

Escape from Model Land: How Mathematical Models Can Lead Us Astray and What We Can Do About It
Erica Thompson
Review via The Economist
The author calls on data geeks to improve their solutions to real-world issues, not merely refine their formulae—in other words, to escape from model land. “We do not need to have the best possible answer,” she writes, “only a reasonable one.” Before there is a statistical model, she notes, there is a mental version. Data scientists need self-awareness and empathy as well as mathematical skill.

Sustainable: Moving Beyond ESG to Impact Investing
Terrence Keeley
Review via Pensions & Investments
Why should institutional investors at pension funds, endowments and foundations read Terrence Keeley’s new book?
To hear out Mr. Keeley’s revolutionary idea: If asset owners reallocate just 1.6%, or about $3.5 trillion, of $220 trillion in capital annually, the United Nations Sustainable Development Goals could be achieved easily. That is the total amount of investible assets, whether private or public, equities or fixed income, held by institutions and ultra-high-net-worth investors.
By scrapping traditional ESG index funds, pensions and other institutional funds could invest in impact strategies that truly earn a profit and do good.

Paper Belt on Fire: How Renegade Investors Sparked a Revolt Against the University
Michael Gibson
Summary via publisher (Encounter Books)
Paper Belt on Fire is the unlikely account of how two outsiders with no experience in finance—a charter school principal and defrocked philosopher—start a venture capital fund to short the higher education bubble. Against the contempt of the education establishment, they discover, mentor, and back the leading lights in the next generation of dropout innovators and in the end make their investors millions. Can such a madcap strategy help renew American creativity? Who would do such a thing?

Adam Smith’s America: How a Scottish Philosopher Became an Icon of American Capitalism
Glory M. Liu
Summary via publisher (Princeton U. Press)
Drawing on a trove of illuminating archival materials, Liu tells the story of how an unassuming Scottish philosopher captured the American imagination and played a leading role in shaping American economic and political ideas. She shows how Smith became known as the father of political economy in the nineteenth century and was firmly associated with free trade, and how, in the aftermath of the Great Depression, the Chicago School of Economics transformed him into the preeminent theorist of self-interest and the miracle of free markets.

Quantitative Methods for ESG Finance
Cino Robin Castelli and Cyril Shmatov
Summary via publisher (Wiley)
A quantitative analyst’s introduction to the theory and practice of ESG finance. In Quantitative Methods for ESG Finance, accomplished risk and ESG experts Dr. Cyril Shmatov and Cino Robin Castelli deliver an incisive and essential introduction to the quantitative basis of ESG finance from a quantitative analyst’s perspective. The book combines the theoretical and mathematical bases underlying risk factor investing and risk management with accessible discussions of ESG applications. The authors explore the increasing availability of non-traditional data sources for quantitative analysts and describe the quantitative/statistical techniques they’ll need to make practical use of these data.

The Clean Energy Transition: Policies and Politics for a Zero-Carbon World
Daniel J. Fiorino
Summary via publisher (Polity)
Is the goal of a transition to clean energy at all realistic? If so, how could it be accomplished? Climate change poses a formidable challenge for twenty-first-century governments. Unless they can move to a clean energy system built on efficiency, renewables, electrification, and possibly complementary technologies like nuclear energy and carbon capture and storage, it will be all but impossible to avoid the worst impacts of climate change.

Economic Rationality: What is Political Economy?
Stephen G. Engelmann
Summary via publisher (Polity)
Multiple global crises are exposing how deficient economic rationality is as a political theory, since a focus on choice turns actors away from relations in the common. Political economy once targeted aristocratic rule – heralding a politics and ethics of egalitarian self-command and spurring democratic reform – but economics allows domination and forecloses alternatives to it.This accessible volume will be of interest to students and scholars of politics and economics, and to general readers concerned about the various ways that psychology and management have infiltrated our politics.

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