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Plenty of interest, but not much original thinking, and not for the lay reader
on 13 January 2009
I found plenty of interest in this volume, but also parts which made my eyes glaze over. I have a background in economics, but I do find thickets of financial jargon hard to comprehend at times. I have to admit that I skipped a few pages here and there, but only where I couldn't see the relevance to my own interests.
The author covers what he calls the 'journey' to the 'secular destination' in the global financial and economic landscape. Essentially this represents changes in the global economy which are taking place now and are likely to continue for a number of years into the future: the buildup of current account surpluses in emerging and oil-rich economies in recent years, and the counterpart deficits in some countries in the rich world, particularly the US; the emergence of Sovereign Wealth Funds (SWFs) in the former group of countries and their evolving investment strategies; and the shift in global growth towards emerging economies and away from the US as the global 'spender of last resort'.
The author traces, in a somewhat opaque fashion, the origins of the current financial crisis, though the book was published in early 2008 and he misses out on the really serious financial turmoil that took place towards the end of that year. To be fair however, he does promise a 'bumpy ride' to his 'secular destination'.
He calls for reform on the part of investors, and national and international policy-makers to make the 'journey' of economic adjustments as smooth as possible. It may be a little late for that given recent events, but perhaps his intentions could be heeded to avoid further major disruptions. I was really looking forward to what he had to suggest in these areas but I was disappointed. He has good intentions, but is vague in his suggestions and admits that the jury is out in many of the debates. If that is the case, why promise much with chapter headings such as 'an action plan for national policy-makers'?
A couple of other gripes: the graphs are poorly presented and labeled, and he does name-drop current and ex-colleagues quite a bit, which was unnecessary.
The author is clearly highly intelligent and accomplished and the book was ranked by The Economist as one of the best reads for 2008. All in all, for me, there were good bits, poor bits, and difficult bits. The reader will need a background in economics and finance to fully grasp it. And if they read and understand the financial pages regularly they probably won't need this book.