New Books in Finance

We’ve all heard that a picture is worth a thousand words, but what if we don’t understand what we’re looking at? Social media has made charts, infographics, and diagrams ubiquitous―and easier to share than ever. We associate charts with science and reason; the flashy visuals are both appealing and persuasive. Pie charts, maps, bar and line graphs, and scatter plots (to name a few) can better infor...

Tired of the mechanical, narrowly rational human behavior of the Chicago school, but not exactly comforted by the emphasis on irrational activity in behavioral economics? So am I. Richard Robb, professor at Columbia and fund manager, offers a third way. In Willful: How We Choose What We Do (Yale University Press, 2019), Robb develops the notion of "for itself" behavior and decision making that can...

As you may know, university presses publish a lot of good books. In fact, they publish thousands of them every year. They are different from most trade books in that most of them are what you might called "fundamental research." Their authors--dedicated researchers one and all--provide the scholarly stuff upon which many non-fiction trade books are based. So when you are reading, say, a popular hi...

Whether man-made or naturally occurring, large-scale disasters can cause fatalities and injuries, devastate property and communities, savage the environment, impose significant financial burdens on individuals and firms, and test political leadership. Moreover, global challenges such as climate change and terrorism reveal the interdependent and interconnected nature of our current moment: what occ...

Culture matters. And a key element of culture is storytelling. These maxims can be accepted as given, except in modern economics, where the mechanistic framework of modern macroeconomic analysis allows just for formulas. Concerned about the relationship between unemployment levels and inflation? Here's the formula:  gW = gWT - f(U − U*) + λ·gPex    It's called the Phillips Curve. Your personal exp...

“Free enterprise” is an everyday phrase that connotes an American common sense. It appears everywhere from political speeches to pop culture. And it is so central to the idea of the United States that some even labeled Christopher Columbus and the Pilgrims free enterprisers. In his new book, Free Enterprise: An American History (Yale University Press, 2019), Lawrence Glickman analyses that phrase’...

I spoke with James C. W. Ahiakpor, he is Professor Emeritus, Department of Economics, at California State University, East Bay, USA. We discussed his new book Macroeconomics without the Errors of Keynes: The Quantity Theory of Money, Saving, and Policy (Routledge, 2019) A provocative title for a very original book that is a critique not only of Keynes but also of some of his followers and his scho...

Dividend investors are a small but dedicated band. Ten years into a stock market rally led by no or low-dividend paying companies, they still argue in favor of long-term business ownership rather than betting on near-term prices in the market. They still view a dividend as, in the words of Richard Russell, "a true return on investment. Everything else is hope and speculation." David Bahnsen is jus...

The authors of Chains of Finance: How Investment Management is Shaped (Oxford University Press, 2017) make points that professionals already know and that end-investors ought to know: that there are a lot of cooks in the investment kitchen, and that the investment process is materially shaped by the chain of individuals and institutions that go into manufacturing investment products. Advisors, con...

Federal housing finance policy and mortgage-backed securities have gained widespread attention in recent years because of the 2008 financial crisis, but government credit has been part of American life since the nation’s founding. Sarah L. Quinn’s new book dissects the political and social development of these policies in American Bonds: How Credit Markets Shaped a Nation (Princeton University Pre...

How are markets made? In Automating Finance: Infrastructures, Engineers, and the Making of Electronic Markets (Cambridge University Press, 2019), Juan Pablo Pardo-Guerra, an assistant professor in sociology at the University of California, San Diego, explores the history of the finance industry to understand the role of markets and technologies in contemporary capitalism. The book offers a detaile...

Small is beautiful, right? Isn't that what we've all been taught? From Jeffersonian politics to the hallowed family farm, from craft breweries to tech start ups in the garage. Small business is the engine and the soul and the driver of the American system. That's the dominant narrative. And according to Robert Atkinson and Michael Lind, it is really wrong. In their new book, Big is Beautiful: Debu...

The machines have taken over.... For many operating in investment management, it can certainly seem that way: factor investing, algorithmic investing, dynamic hedging instruments, risk management derivatives driven by changes in market prices, etc. dominate much of the investment narrative. And now and again these supposedly superior investment approaches get blamed for causing big blow ups. If po...

What can we learn from the financial crisis that brought Hitler to power? How did diplomatic deadlock fuel the rise of authoritarianism? Tobias Straumann shares vital insights with 1931: Debt, Crisis, and the Rise of Hitler (Oxford University Press, 2019). Through his fast-paced narrative, Straumann reveals how inflexible treaties created an inescapable debt trap that spawned Nazism. Caught betwee...

In 1647, the French author Étienne Cleirac asserted in his book Les us, et coustumes de la mer that the credit instruments known as bills of exchange had been invented by Jews. In The Promise and Peril of Credit: What a Forgotten Legend about Jews and Finance Tells Us about the Making of European Commercial Society (Princeton University Press, 2019), Francesca Trivellato draws upon the economic, c...

If you are reading this, you have probably run into the "Chicago" model at some point or another, in terms of public policy, orthodox modern finance, macro or micro economics, or any other arena where theoretical abstractions about human behavior (generally but not exclusively about or derived from economics) have been turned into specific and often highly rigid and mechanistic policy guidelines....

Recent economic crises have made the centrality of debt, and the instability it creates, increasingly apparent. In Beyond Debt: Islamic Experiments in Global Finance (University of Chicago Press, 2018), anthropologist Daromir Rudnyckyj illustrates how the Malaysian state, led by the central bank, is seeking to make the country’s capital Kuala Lumpur the central node of global financial activity co...

Think that today's debates about the role of the Federal Reserve Bank, financial regulation, "too big to fail", etc. are new?  Think again. Who should control banks, who should regulate banks, what should banks even do--these questions have been debated since the founding of the Republic.  Replace CNBC's David Faber with Alexander Hamilton, and Joe Kernan with Thomas Jefferson (or James Madison) a...

Lumbering late Tsarist Russia and international finance? Is there anything there?  The Bolsheviks and finance? How can there be anything there?   It turns out that the answer to both questions is yes.  In Dr. Hassan Malik's meticulously researched new book, Bankers and Bolsheviks: International Finance and the Russian Revolution (Princeton University Press, 2018), the Tsarist government's relation...

You mean accounting has a history?  Yes, it does, and it should matter to you, because the accounting profession, and the audit function that it serves, affects all the companies in your 401(k) program.  Remember WorldCom, remember Enron? Every time a large holding of yours writes off the goodwill from a failed acquisition--there are too many examples to recite here--you've just had an accounting...

Is microfinance the magic bullet that will end global poverty or is it yet another a form of predatory lending to the poor? In her new book Financializing Poverty: Labor and Risk in Indian Microfinance (Stanford University Press, 2018), Sohini Kar brings ethnography to bear on this urgent question. Drawing on fieldwork with a for-profit microfinance institution (MFI) and its intended beneficiaries...

The vast chasm between classical economics and the humanities is widely known and accepted. They are profoundly different disciplines with little to say to one another. Such is the accepted wisdom. Fortunately, Professors Gary Saul Morson and Morton Schapiro, both of Northwestern University, disagree.  In their new book, Cents and Sensibility: What Economics Can Learn from the Humanities (Princeto...

Today we spoke with with Dirk H. Ehnts to talk about his new book Modern Monetary Theory and European Macroeconomics (Routledge, 2017). This is a very accessible text for those interested in discovering how monetary policy works and those interested in approaching the debate on the challenges of the Euro area. We talked about the notions of endogenous and exogenous money and how central banks and...

In his engaging and original book The Wisdom of Finance: Discovering Humanity in the World of Risk and Return (Houghton Mifflin Harcourt, 2017), Harvard Professor Mihir A. Desai takes on the daunting task of explaining the world of finance through the prism of the humanities, yes the humanities. Using stories from literature, film, music, popular culture and daily life, Desai argues that rather th...

Of what use is history, particularly for economists and people in finance? If you’ve ever wondered about this, you should read Daniel Peris‘s book Getting Back to Business: Why Modern Portfolio Theory Fails Investors and How You Can Bring Common Sense to Your Portfolio (McGraw-Hill Education, 2018). Before he became a portfolio manager, Peris was a professional historian. He was trained as such, w...