The Shifts and the Shocks

The Shifts and the Shocks

What We’ve Learned—and Have Still to Learn—from the Financial Crisis

Format
Hardcover
 
Additional Formats
  • Hardcover
  • ISBN 9781594205446
  • 464  Pages
  • Penguin Press
  • Adult

Overview

From the chief economic commentator for the Financial Times, a brilliant tour d’horizon of the new global economy and its trajectory

There have been many books that have sought to explain the causes and courses of the financial and economic crisis which began in 2007–8. The Shifts and the Shocks is not another detailed history of the crisis, but the most persuasive and complete account yet published of what the crisis should teach us about modern economies and economics.

The book identifies the origin of the crisis in the complex interaction between globalization, hugely destabilizing global imbalances and our dangerously fragile financial system. In the eurozone, these sources of instability were multiplied by the tragically defective architecture of the monetary union. It also shows how much of the orthodoxy that shaped monetary and financial policy before the crisis occurred was complacent and wrong. In doing so, it mercilessly reveals the failures of the financial, political and intellectual elites who ran the system.

The book also examines what has been done to reform the financial and monetary systems since the worst of the crisis passed. “Are we now on a sustainable course?” Wolf asks. “The answer is no.” He explains with great clarity why “further crises seem certain” and why the management of the eurozone in particular “guarantees a huge political crisis at some point in the future.” Wolf provides far more ambitious and comprehensive plans for reform than any currently being implemented.

Written with all the intellectual command and trenchant judgment that have made Martin Wolf one of the world’s most influential economic commentators, The Shifts and the Shocks matches impressive analysis with no-holds-barred criticism and persuasive prescription for a more stable future. It is a book no one with an interest in global affairs will want to neglect.

Praise

Ben Bernanke:
“Building on his earlier book, Fixing Global Finance, in The Shifts and the Shocks Martin Wolf provides an insightful and timely analysis of how global imbalances, international capital flows, and economic policies have helped create a financially fragile world.”

Lawrence Summers:
“Martin Wolf is unsurpassed in the world of economic journalists. His superb book may be the best of all those spawned by the Great Recession. It is analytical and rigorous and without ever succumbing to fatalism or complacency. It should be read by anyone concerned with macroeconomic or financial policy going forward.”

George Soros:
“In this important book, Martin Wolf demonstrates that the Eurozone crisis was due to the interaction between powerful global economic and financial forces and the inadequacies of its economic and political structure. He also demonstrates that the Eurozone has not eliminated these weaknesses. The crisis is not yet over.”

Mervyn King:
“A masterly account of the financial crisis seen in its true international perspective.”

Adair Turner:
“The 2008 financial crisis was an economic disaster, but as Martin Wolf brilliantly argues the policy response has failed to address the fundamental drivers of instability—excessive debt creation, global imbalances and inequality. To think straight about causes and solutions we must reject orthodox assumptions that more finance and global financial integration are limitlessly beneficial. The Shifts and the Shocks does just that, providing an intellectually sparkling and vital account of why the crisis occurred, and of the radical reforms needed if we are to avoid a future repeat.”

Paul Tucker, Senior Fellow, Harvard University:
“Martin Wolf has ranged more widely than perhaps any other author in trying to make sense of the global financial crisis and how to avoid its recurrence. Macroeconomics, finance, ideas, institutions, policy, politics; Europe, Asia, the US—they are all here. Whether or not one agrees with Wolf’s analysis and prescriptions, this book will help everyone work out what they think. A must read.”

Anat Admati, Stanford University; co-author of The Bankers’ New Clothes: What’s Wrong with Banking and What to Do About It:
“In this powerful and important book, Martin Wolf exposes the forces that shaped our fragile financial system and brought harm to so many, with particular attention to the crisis in Europe. His insights and urgent call to prevent more harm must be heard.”

William H. Janeway, Warburg Pincus; University of Cambridge:
“Martin Wolf has been the world’s leading commentator on the Global Financial Crisis and its economic consequences: now in The Shifts and the Shocks he demonstrates with compelling force that the essential response to financial fragility is to make banks boring: lots more capital, much lower prospective returns.”
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