GLOBAL FINANCE

Finance in the 21st Century

Howard Davies and Robert J. Shiller

Is the dollar doomed? Can increased regulation and financial innovation co-exist? What makes housing markets suddenly turn "hot" or "cold"? Why should long-term bond prices shoot up and down in a single year? Can financial globalization be effectively regulated without stifling growth?

RECENT COMMENTARIES

FEATURED COMMENTARIES

Does Austerity Promote Economic Growth?

Robert J. Shiller Series: Finance in the 21st Century

2012-01-18

Policymakers cannot afford to wait decades for economists to figure out definitively how government austerity affects growth. But, judging by the evidence that we have, austerity programs in Europe and elsewhere appear likely to yield disappointing results.... read

Comments: 12 Recommended: 2 Read: 32251

London vs. the Eurozone

Howard Davies Series: Finance in the 21st Century

2011-12-14

David Cameron's veto of the plan to save the euro was a big gamble, and suggests that the UK is shuffling towards the EU exit.... read

Comments: 4 Recommended: 0 Read: 21686

The Neuroeconomics Revolution

Robert J. Shiller Series: Finance in the 21st Century

2011-11-21

Economics is at the start of a revolution that is traceable to an unexpected source: medical schools and their research facilities. Neuroscience – the science of how the brain works – is beginning to change the way we think about how people make decisions.... read

Comments: 27 Recommended: 1 Read: 89650

The Bankers’ Capital War

Howard Davies Series: Finance in the 21st Century

2011-10-19

Almost everyone nowadays agrees that banks need more capital. But a wide gap has opened up between financial authorities and the banks on the costs and benefits of the much higher capital requirements that regulators are now demanding.... read

Comments: 6 Recommended: 0 Read: 17592

The Great Debt Scare

Robert J. Shiller Series: Finance in the 21st Century

2011-09-23

Most confidence indices today are based on survey questions that ask respondents to assess the economy today or in the near future. But what today's debt fears in Europe and the US really reflect – and what is holding back consumption and investment – is widespread anxiety about long-term economic prospects.... read

Comments: 5 Recommended: 3 Read: 44040

Europe’s Financial Wasteland

Howard Davies Series: Finance in the 21st Century

2011-08-19

“April is the cruelest month,” wrote T.S. Eliot at the beginning of his great poem, “The Waste Land.” But, if Eliot had been a professional investor who had observed European financial markets over the last few years, his choice most likely would have been August.... read

Comments: 11 Recommended: 0 Read: 25011

Debt and Delusion

Robert J. Shiller Series: Finance in the 21st Century

2011-07-21

The fundamental problem for much of the world today is that investors are overreacting to debt-to-GDP ratios, fearful of some magic threshold, and demanding fiscal-austerity programs too soon. We should worry less about debt ratios and thresholds, and more about our inability to see these indicators for the often-irrelevant constructs that they are.... read

Comments: 15 Recommended: 5 Read: 65423

Chinese Finance Comes of Age

Howard Davies Series: Finance in the 21st Century

2011-06-23

Back in 2002, all of China’s major banks were awash in non-performing loans, which in some cases amounted to more than 10% of the total balance sheet. Less than a decade later, much has changed – with some important lessons for Western regulators.... read

Comments: 1 Recommended: 0 Read: 20181

Economy, Insure Thyself

Robert J. Shiller Series: Finance in the 21st Century

2011-05-27

If countries covered their risks by issuing a different kind of national debt, tied to their own GDP or a similar measure of economic success, many would have a much debt burden today. Just ask Japan.... read

Comments: 4 Recommended: 1 Read: 22255

Reforming Bank Reform	Howard Davies
Over the last three years, oceans of ink (or bytes) have been expended on articulating schemes to solve the conundrum of “too big to fail” banks. But a new report by the UK's Independent Banking Commission casts serious doubt on the main proposals for reform.... read

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Debt and Delusion

Robert J. Shiller Series: Finance in the 21st Century

2011-07-21

Comments: 15 Recommended: 5 Read: 65423

A People’s Economics

Robert J. Shiller Series: Finance in the 21st Century

2011-01-20

The financial crisis has deflated professional economists' scientific pretensions, because they failed to predict it. Part of the process of pursuing the inexact aspects of economics must be speaking honestly to the broader public, learning from them, and then searching one’s soul to decide whether one's favored theory is really close to the truth.... read

Comments: 6 Recommended: 3 Read: 32851

Shorting Fiscal Consolidation

Robert J. Shiller Series: Finance in the 21st Century

2010-11-18

Real long-term interest rates have fallen to historic lows in much of the world. This is an economic fact of fundamental significance, for the real long-term interest rate is a direct measure of the cost of business financing – and because current levels fly in the face of all the talk about the need to slash government deficits.... read

Comments: 4 Recommended: 2 Read: 30617

Finance Agonistes

Howard Davies Series: Finance in the 21st Century

2009-07-13

For at least a quarter-century, the financial sector has grown much more rapidly than the economy as a whole, both in developed and in most developing countries. But there is strong evidence that this was a relatively short-term phenomenon, and that the industry's salad days are well and truly over.... read

Comments: 1 Recommended: 0 Read: 28813

Time to Nationalize Insolvent Banks

Nouriel Roubini Series: Finance in the 21st Century

2009-02-13

Nationalizing insolvent banks is, paradoxically, the most market-friendly way to clean up a rotten financial sector. Whereas Sweden adopted this approach successfully during its banking crisis in the early 1990’s, the current US and British approach may end up producing Japanese-style zombie banks – never properly restructured and perpetuating a credit freeze for years. ... read

Comments: Recommended: Read:

Reviving the Animal Spirits

Robert J. Shiller Series: Finance in the 21st Century

2008-11-13

The world’s fundamental economic problem today is a staggering loss of business confidence - a weakening of what Keynes called the "animal spirits." One reason is that people know enough about the Great Depression to understand that, unlike previous economic convulsions, there are parallels with today.... read

Comments: 1 Recommended: 0 Read: 39642

From Financial Meltdown to Global Depression?

Nouriel Roubini Series: Finance in the 21st Century

2008-10-14

When policy actions don’t provide relief to market participants, you know that you are one step away from a collapse of the financial system and the corporate sector. Will the recent measures adopted by the US and Europe be enough to ward off a global depression?... read

Comments: Recommended: Read:

Do Low Interest Rates Ensure High Asset Prices?

Robert J. Shiller Series: Finance in the 21st Century

2005-09-26

Asset prices– stocks, commercial real estate, and even oil – are, historically, at high levels around the world. Although history is often a good predictor of future trends, every now and then something fundamental changes that makes for a new pattern. The important question now is whether today’s high asset prices are the result of some such fundamental development, or whether bubbles have formed. ... read

Comments: 0 Recommended: 0 Read: 48655

Let’s Get Real About Money

Robert J. Shiller Series: Finance in the 21st Century

2005-12-27

Throughout the world, people suffer from a serious perception error that has inhibited them from taking concrete steps to protect themselves from inflation or deflation. The error is called the “money illusion ” – the belief that a nominal unit of currency is the best measure of value, even though its real value is unstable.... read

Comments: 0 Recommended: 0 Read: 48403

Is China’s Economy Overheating?	Robert J. Shiller
The Chinese economy has been growing at such a breathtaking annual pace – 9.5% in the year ending in the second quarter of 2005 – that it is the toast of the world, an apparent inspiration for developing countries everywhere. But is China getting too much of a good thing?... read
The Great Debt Scare	Robert J. Shiller
Most confidence indices today are based on survey questions that ask respondents to assess the economy today or in the near future. But what today's debt fears in Europe and the US really reflect – and what is holding back consumption and investment – is widespread anxiety about long-term economic prospects.... read

AUTHOR INFO

Howard Davies

Howard Davies, a former chairman of Britain’s Financial Services Authority, Deputy Governor of the Bank of England, and Director of the London School of Economics, is a professor at Sciences Po in Paris.

Robert J. Shiller

Robert Shiller, Professor of Economics at Yale University, is co-author, with George Akerlof, of Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism.

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GLOBAL FINANCE

Finance in the 21st Century

Howard Davies and Robert J. Shiller

Does Austerity Promote Economic Growth?

London vs. the Eurozone

The Neuroeconomics Revolution

The Bankers’ Capital War

The Great Debt Scare

Europe’s Financial Wasteland

Debt and Delusion

Chinese Finance Comes of Age

Economy, Insure Thyself

Debt and Delusion

A People’s Economics

Shorting Fiscal Consolidation

Finance Agonistes

Time to Nationalize Insolvent Banks

Reviving the Animal Spirits

From Financial Meltdown to Global Depression?

Do Low Interest Rates Ensure High Asset Prices?

Let’s Get Real About Money

AUTHOR INFO

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