The Shifts and the Shocks

The Shifts and the Shocks

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

Written by:

Additional Formats
  • Hardcover
  • ISBN 9781594205446
  • 496 Pages
  • Penguin Press
  • Adult


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.


Felix Salmon, The New York Times Book Review:
“Martin Wolf is as grand and important as an economic journalist can ever become…. The Shifts and the Shocks is extremely good at untangling the causes of the global financial crisis.”

Joseph Stiglitz, Financial Times:
“Martin Wolf has outdone himself. The FT’s chief economics commentator has written a book that not only explains the malaise in which we have been mired since 2008 but also—depressingly—provides a convincing analysis of why we are likely to remain so. Already, the crisis has spawned a plethora of titles examining what went wrong. The Shifts and the Shocks is among the first to address the absence of a robust recovery and it sets a high bar for those that will surely follow…One of the things that distinguishes Wolf’s analysis from so many others is that he sees the crisis as more than a financial crisis—an insight that is essential if we are to understand the failure to achieve a robust recovery…Wolf may have written the book to shake us out of our stupor.”

Paul Krugman, The New York Review of Books:
“Extended, learned, and well-informed…Since the new sort-of consensus is clearly much more realistic than the pre-crisis complacency, Wolf, the chief economics commentator of the Financial Times, has performed a very useful service by putting it all together in one readable book…Wolf argues rightly that a fuller picture requires paying attention to the wider world…The Shifts and the Shocks is an excellent survey of how we arrived at the mess we’re in, and Wolf’s substantive proposals at the end, especially for reform of the euro system—system-wide deposit insurance, higher inflation so that the burden of adjustment is better shared, among other reforms—are all worthy and laudable. But the gods themselves contend in vain against stupidity. What are the odds that financial reformers can do better?”

The Economist:
The Shifts and the Shocks is a fierce indictment of the global economy and a call for radical reform…Mr Wolf’s contribution is comprehensiveness and a piercing logic in piecing the disparate elements together. He weaves the macroeconomic and financial elements of the crisis, its origins and aftermath, into an all-encompassing analysis. Along the way he demolishes many of the popular explanations—such as that the mess was due to greedy bankers or to loose monetary policy—as too simplistic. The result is convincing and depressing; there are no quick fixes…An important contribution that anyone involved in economic policy ought to read.”

Andrew Ross Sorkin, The New York Times:
“A surprisingly refreshing look at the biggest financial calamity since the Great Depression. Just when you thought everything that could be said about the crisis had been said, Mr. Wolf adds something new…Wolf deftly weaves together the components of the crisis, examining it from 10,000 feet up: globalization, monetary policy, banking architecture.”

Robert Lenzner, Forbes:
“[A] worthy and wise new book…A primer on the interaction between global macroeconomic forces and what Wolf dares to call ‘an increasingly fragile, liberalized financial system.’ And it never goes off the rational, pragmatic track toward order, fragile or not.”

Irish Examiner (UK):
“Profound, disturbing and prophetic… [Wolf’s] analysis is rigorous and deals fairly with opposing points of view. As a result, the proposals he presents for future action merit very close consideration.”
“Unsettling to anyone who thinks the financial system is any more stable now…Wolf has, once again, written an erudite, brilliant and data-heavy book on global macroeconomics.”

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.”