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on 26 January 2016
Like his hero James Clerk Maxwell, the author presents complex ideas in the clearest possible language without "dumbing down". The result is an incisive analysis of the causes of financial crises and the competing theoretical frameworks used to describe them. Cooper uses many examples to demolish the Efficient Market Hypothesis and shows how Minsky's model of the economy as inherently cyclical fits the observed behaviour much better. To his credit he goes beyond analysis and makes positive recommendations for action, and avoids the simplistic proposals of "free market" extremists such as abolishing central banks or returning to the gold standard. Indeed, he clearly sets out the role and responsibilities of central banks, and explains precisely how they are failing in those responsibilities today.
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on 21 February 2010
`Regulatory and supervisory policies, rather than monetary policies, would have been more effective means of addressing the run-up in house prices.' thus spake Ben Bernanke in a speech in January 2010. I actually read this book some time ago but was prompted to look at it again & write this review after what the Chairman of the Fed said. It proves that this superb book is more relevant than ever, as the Fed has clearly not learned the lessons & is in denial about its crucial role in the great debt bubble of the noughties. Indeed, with the ramping up of asset prices following `Quantitative Easing', the Fed and the UK authorities may be fuelling another asset price bubble.

The first thing to say about this book is that it is short: no issues about `Too Big to Read' here. Secondly, whilst it deals with highly complex topics about how modern economies function and are governed, any intelligent person not versed in economic theory will be able to read & understand it.

The basic hypothesis is that the markets for financial assets are not the same as the markets for goods and other services, where the efficient market paradigms work well. Whereas the market for basic goods will find a natural equilibrium level if left alone, financial asset prices are inherently unstable. Cooper illustrates this point using very simple examples which work very effectively. Anyone who has worked in financial markets through a business cycle (rather than studied them academically) knows this instinctively, but the explanation here is very clear.

By not understanding this distinction Central Bankers (the Fed in particular), have amplified this instability, whereas their job should be to help the system purge itself: in Fed Governor Chesney Martin's famous words 'The job of the Federal Reserve is to take away the punchbowl just when the party gets going.' Cooper uses some very good analogies to explain what the proper role of a Central Bank should be (including how the Eurofighter works, which is interesting in itself!). Just a shame that they don't seem to be listening.

There are probably hundreds of books by now about the crash, but if anyone wants to understand the background to it (rather than a blow-by-blow account) I would recommend reading this and `Fools Gold' by Gilllian Tett. Both books are well written, accurate and clear about complex topics, and not too long either.
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on 2 February 2014
I admit I've never heard of the financial instability hypothesis before but he does a great job of explaining it and just when I thought the book culminated with this, he put into a larger context referencing some very unlikely sources. Though the first half of the book is relatively simple and perhaps not too focused I would recommend the second half onward to just about anyone of any level.
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on 13 September 2012
This book is well-written and is a concise and clear history of how the world economy came to be so reliant on fiat currencies (rather than the gold standard) and the perils this entails.

It is not an economics text book and it is polemical in that George Cooper makes a persuasive case for why there is no easy monetarist solution to the banking crisis and why the ideas of J M Keynes both help us to understand the crisis as well as deal with its consequences.

I'd recommend it to anyone as a thought-provoking analysis of the banking industry and how a credit based economy cannot avoid boom and bust.
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on 20 November 2011
Fascinating book. Many anologies with the real world make this book easy to read and to gain an understanding into the more complex issues of finance and the cyclic effects of boom and bust. Highly recommended.
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on 18 November 2014
Top class accessible analysis of the crisis and the failure of conventional economics to see it coming by someone who has a PhD in economics and worked for the big shadow banks as well--and warned them of the crisis before it happened too.
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on 13 June 2016
Like the curate's egg, good in parts
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on 26 November 2015
not bad
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on 24 October 2014
quick delivery, good price
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on 6 March 2017
Clear, well written and surprisingly amusing
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