Authors: Atish R. Ghosh, Jonathan D. Ostry and Mahvash S. Qureshi – IMF
Focusing on the macroeconomic and financial-stability risks associated with capital flows, the authors combine theoretical and empirical analysis to consider the interaction between monetary, exchange rate, macroprudential, and capital control policies to mitigate these risks. They examine the effectiveness of various policy tools, discuss the practical considerations and multilateral implications of their use, and provide concrete policy advice for dealing with capital inflows.
In the aftermath of the global financial crisis, the International Monetary Fund changed its views on capital flows, recognizing that controls on the flows of money across national borders could serve a legitimate economic need. The economists leading this quiet revolution at the IMF now have written a book detailing the new thinking. Beyond the theory and empirics, what makes the book especially useful is the attention the authors pay to the practical aspects of managing capital flows. Policy makers and international economists alike will greatly benefit from it.
Dani Rodrik, Harvard University
Authors: Jonathan Haskel (Imperial College), Stian Westlake (Nesta)
Haskel and Westlake bring together a decade of research on how to measure intangible investment and its impact on national accounts, showing the amount different countries invest in intangibles, how this has changed over time, and the latest thinking on how to assess this. They explore the unusual economic characteristics of intangible investment, and discuss how these features make an intangible-rich economy fundamentally different from one based on tangibles.
This fascinating book examines an important but overlooked subject—the intangible nature of capital and activity in the modern economy. The transformation of the intangible economy has rarely been pointed out, and its implications are not much understood or discussed. There are no other books similar to this one.
Diane Coyle, University of Manchester
Author: Tamim Bayoumi (IMF)
Starting in the 1980s, Bayoumi outlines the cumulative policy errors that undermined the stability of both the European and U.S. financial sectors, highlighting the catalytic role played by European mega banks that exploited lax regulation to expand into the U.S. market and financed unsustainable bubbles on both continents. U.S. banks increasingly sold sub-par loans to under-regulated European and U.S. shadow banks and, when the bubbles burst, the losses whipsawed back to the core of the European banking system.
Tamim Bayoumi’s Unfinished Business is an important corrective to much of the received wisdom coming out of the North Atlantic Financial Crisis. Bayoumi convincingly argues that intellectually blinkered and politically driven policy decisions long before 2007 set up the crisis – notably in European bank practices. This root cause is all too often overlooked in the rampant but shallow arguments that blame the bubble and bust on monetary ease, savings gluts, or Minsky moments. It also gives more hope for future crisis prevention, and thus a policy agenda to finish.
Adam S. Posen, Peterson Institute for International Economics
Authors: Edward L. Glaeser (Harvard University), Tano Santos (Columbia University), Glen Weyl (Yale University)
A momentous collection of the best recent scholarship, After the Flood illustrates both the scope of the crises’ impact on our understanding of global financial markets and the innovative processes whereby scholars have adapted their research to gain a greater understanding of them. Among the contributors are José Scheinkman and Lars Peter Hansen, who bring up to date decades of collaborative research on the mechanisms that tie financial markets to the broader economy; Patrick Bolton, who argues that limiting bankers’ pay may be more effective than limiting the activities they can undertake; Edward Glaeser and Bruce Sacerdote, who study the social dynamics of markets; and E. Glen Weyl, who argues that economists are influenced by the incentives their consulting opportunities create.
After the Flood covers an impressive breadth of topics—fitting for a book in honor of well-respected economist José Sheinkman’s contributions. Many of the essays deal with an important topic in Sheinkman’s recent research: the regulation and social value of financial institutions. Leading scholars in the field—some of them Scheinkman’s collaborators, including Tano Santos, Patrick Bolton, Albert S. Kyle, Aloisio Araujo, Rafael Ferreira, and Bruno Funchal—provide thoughtful essays, which will significantly advance the field.
Eduardo Azevedo, Wharton School, University of Pennsylvania
