Book Bits | 7 October 2017

Real Impact: The New Economics of Social Change
By Morgan Simon
Review via Publishers Weekly
Simon, founder and chair of the nonprofit Transform Finance, opens this fast-paced, provoking book with a crash course in impact investing, “the trillion-dollar trend most people have never heard of.” As she explains, impact investment (the Rockefeller Foundation’s term) means investing for social benefit as well as profit. Simon starkly concludes that the current, well-intentioned “free-market-plus-charity model” hasn’t effected substantive change. According to a study cited here, only 12% of foundational giving goes to social-justice causes; the rest supports education and arts organizations that largely service the already wealthy or at least economically secure.

The Corruption Cure: How Citizens and Leaders Can Combat Graft
By Robert I. Rotberg
Review via Foreign Affairs
Although the political establishment, including the justices of the Supreme Court, may cling to a legal notion of corruption, ordinary Americans’ more visceral understanding is in line with an anticorruption Zeitgeist that has swept the world in the past decade. In Brazil, huge, ongoing street protests over the course of two years have bolstered the federal police force and a crusading jurist, Sérgio Moro, as they have investigated and brought to justice high-ranking perpetrators in a web of corruption scandals. Their work has already led to the impeachment of one president, Dilma Rousseff, and her successor, Michel Temer, is also in the cross hairs. A similar movement has shaken Guatemala, where a UN-backed commission has helped prosecutors bring charges against dozens of officials, including Otto Pérez Molina—who was the country’s president until 2015, when he resigned and was arrested on corruption charges. Earlier this year, South Korean President Park Guen-hye met the same fate.

Shortfall: Family Secrets, Financial Collapse, and a Hidden History of American Banking
By Alice Echols
Summary via publisher (New Press)
Shortfall opens with a surprise discovery in an attic—boxes filled with letters and documents hidden for more than seventy years—and launches into a fast-paced story that uncovers the dark secrets in Echols’s family—an upside-down version of the building and loan story at the center of Frank Capra’s 1946 movie, It’s a Wonderful Life. In a narrative filled with colorful characters and profound insights into the American past, Shortfall is also the essential backstory to more recent financial crises, from the savings and loan debacle of the 1980s and 1990s to the subprime collapse of 2008.

Financial Decisions and Markets: A Course in Asset Pricing
By John Y. Campbell
Summary via publisher (Princeton University Press)
In Financial Decisions and Markets, John Campbell, one of the field’s most respected authorities, provides a broad graduate-level overview of asset pricing. He introduces students to leading theories of portfolio choice, their implications for asset prices, and empirical patterns of risk and return in financial markets. Campbell emphasizes the interplay of theory and evidence, as theorists respond to empirical puzzles by developing models with new testable implications. The book shows how models make predictions not only about asset prices but also about investors’ financial positions, and how they often draw on insights from behavioral economics.

Beyond Austerity: Reforming the Greek Economy
Edited by Costas Meghir, et al.
Summary via publisher (MIT Press)
More than eight years after the global financial crisis began, the economy of Greece shows little sign of recovery, and its position in the eurozone seems tenuous. Between 2008 and 2014, incomes in Greece shrank by more than 25 percent, homes lost more than a third of their value, and the unemployment rate reached 27 percent. Most articles on Greece in the media focus on the effects of austerity, repayment of its debt, and its future in the eurozone. In Beyond Austerity: Reforming the Greek Economy, leading Greek economists from institutions both within and outside Greece, take a broader and deeper view of the Greek crisis, examining the pathologies that made Greece vulnerable to the crisis and the implications for the entire eurozone.