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Overview
In the graveyard of economic ideology, dead ideas still stalk the land.
The recent financial crisis laid bare many of the assumptions behind market liberalism--the theory that market-based solutions are always best, regardless of the problem. For decades, their advocates dominated mainstream economics, and their influence created a system where an unthinking faith in markets led many to view speculative investments as fundamentally safe. The crisis seemed to have killed off these ideas, but they still live on in the minds of many--members of the public, commentators, politicians, economists, and even those charged with cleaning up the mess. In Zombie Economics, John Quiggin explains how these dead ideas still walk among us--and why we must find a way to kill them once and for all if we are to avoid an even bigger financial crisis in the future.
Zombie Economics takes the reader through the origins, consequences, and implosion of a system of ideas whose time has come and gone. These beliefs--that deregulation had conquered the financial cycle, that markets were always the best judge of value, that policies designed to benefit the rich made everyone better off--brought us to the brink of disaster once before, and their persistent hold on many threatens to do so again. Because these ideas will never die unless there is an alternative, Zombie Economics also looks ahead at what could replace market liberalism, arguing that a simple return to traditional Keynesian economics and the politics of the welfare state will not be enough--either to kill dead ideas, or prevent future crises.
In a new chapter, Quiggin brings the book up to date with a discussion of the re-emergence of pre-Keynesian ideas about austerity and balanced budgets as a response to recession.
Product Details
ISBN-13: | 9781400842087 |
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Publisher: | Princeton University Press |
Publication date: | 05/21/2012 |
Sold by: | Barnes & Noble |
Format: | eBook |
Pages: | 288 |
File size: | 1 MB |
About the Author
Table of Contents
Preface vii
Introduction 1
Chapter 1: The Great Moderation 5
Birth: Calm after the Storms 8
Life: The Great Risk Shift 13
Death: The Dissenters and Their Vindication 19
Reanimation: A Global Crisis or a Transitory Blip? 30
After the Zombies: Rethinking the Experience of the Twentieth Century 31
Further Reading 34
Chapter 2: The Efficient Markets Hypothesis 35
Birth: From Casino to Calculating Machine 36
Life: Black-Scholes,
Bankers, and Bubbles 39
Death: The Crisis of 2008 50
Reanimation: Chicago Revives the Dead 64
After the Zombies: The State and the Market 66
Further Reading 77
Chapter 3: Dynamic Stochastic General Equili brium 79
Birth: From the Phillips Curve to the NAIRU, and Beyond 83
Life: Rationality and the Representative Agent 106
Death: How Did Economists Get It So Wrong? 110
Reanimation: How Obama Caused the Global Financial Crisis 121
After the Zombies: Toward a Realistic Macroeconomics 123
Further Reading 133
Chapter 4: Trickle -down Economics 136
Birth: From Supply-side Economics to Dynamic Scoring 138
Life: Excuses for Inequality 146
Death: The Rich Get Richer and the Poor Go Nowhere 152
Reanimation: Mobility without Movement 167
After the Zombies: Economics, Inequality, and Equity 168
Further Reading 172
Chapter 5: Privati zation 174
Birth: We Are All Market Liberals Now 178
Life: A Policy in Search of a Rationale 182
Death: Puzzles and Failures 187
Reanimation: Dead for Good? 199
After the Zombies: The Mixed Economy 200
Further Reading 204
Conclusion: Economics for the Twenty -first Century 206
Rethinking the Experience of the Twentieth Century 206
A New Approach to Risk and Uncertainty 207
What Is Needed in Economics 210
References 213
Index 229
What People are Saying About This
This is a terrific book. Quiggin is an engaging writer, and the combination of quotations, history, theory, and hard evidence makes the book quite a page-turner.
Andrew Leigh, Australian National University
Tempted to tangle with your libertarian uncle or your Wall Street Journal bromide-spouting coworkers? If so, this book will arm you to rebut the clever phrasemaking and slippery reasoning that has allowed dead constructs like 'trickle down economics' to soldier onward. Quiggin's clear, elegant dissection of wrongheaded notions will appeal to both lay readers and academic economists.
Yves Smith, author of "ECONned: How Unenlightened Self-Interest Undermined Democracy and Corrupted Capitalism"
Zombie Economics provides a unique and comprehensive discussion of the ideas that failed during the recent financial crisis. But the book contributes much more. Its discussion of how macroeconomics developed, and the ideology that has grown up around it, is every bit as important and interesting.
Mark Thoma, University of Oregon
"Killing vampires and werewolves is easy enough. But how does one slay economic zombies—ideas that should have died long ago but still shamble forward? Armed with nothing but the truth, John Quiggin sets about dispatching these dead ideas once and for all in this engaging book. Zombie Economics should be required reading for those who would dare reanimate the economic theories that brought us to the edge of ruin."—Brad DeLong, University of California, Berkeley"Tempted to tangle with your libertarian uncle or your Wall Street Journal bromide-spouting coworkers? If so, this book will arm you to rebut the clever phrasemaking and slippery reasoning that has allowed dead constructs like 'trickle down economics' to soldier onward. Quiggin's clear, elegant dissection of wrongheaded notions will appeal to both lay readers and academic economists."—Yves Smith, author of ECONned: How Unenlightened Self-Interest Undermined Democracy and Corrupted Capitalism"Zombie Economics provides a unique and comprehensive discussion of the ideas that failed during the recent financial crisis. But the book contributes much more. Its discussion of how macroeconomics developed, and the ideology that has grown up around it, is every bit as important and interesting."—Mark Thoma, University of Oregon"This is a terrific book. Quiggin is an engaging writer, and the combination of quotations, history, theory, and hard evidence makes the book quite a page-turner."—Andrew Leigh, Australian National University
Killing vampires and werewolves is easy enough. But how does one slay economic zombiesideas that should have died long ago but still shamble forward? Armed with nothing but the truth, John Quiggin sets about dispatching these dead ideas once and for all in this engaging book. Zombie Economics should be required reading for those who would dare reanimate the economic theories that brought us to the edge of ruin.
Brad DeLong, University of California, Berkeley