“Mervyn King may well have written the most important book to come out of the financial crisis. Agree or disagree, King’s visionary ideas deserve the attention of everyone from economics students to heads of state.” —Lawrence H. Summers Something is wrong with our banking system. We all sense that, but Mervyn King knows it firsthand; his ten years at the helm of the Bank of England, including at the height of the financial crisis, revealed profound truths about the mechanisms of our capitalist society. In The End of Alchemy he offers us an essential work about the history and future of money and banking, the keys to modern finance. The Industrial Revolution built the foundation of our modern capitalist age. Yet the flowering of technological innovations during that dynamic period relied on the widespread adoption of two much older ideas: the creation of paper money and the invention of banks that issued credit. We take these systems for granted today, yet at their core both ideas were revolutionary and almost magical. Common paper became as precious as gold, and risky long-term loans were transformed into safe short-term bank deposits. As King argues, this is financial alchemy—the creation of extraordinary financial powers that defy reality and common sense. Faith in these powers has led to huge benefits; the liquidity they create has fueled economic growth for two centuries now. However, they have also produced an unending string of economic disasters, from hyperinflations to banking collapses to the recent global recession and current stagnation. How do we reconcile the potent strengths of these ideas with their inherent weaknesses? King draws on his unique experience to present fresh interpretations of these economic forces and to point the way forward for the global economy. His bold solutions cut through current overstuffed and needlessly complex legislation to provide a clear path to durable prosperity and the end of overreliance on the alchemy of our financial ancestors.

'A fearless and important book . . . The End of Alchemy isn't just an elegant guide to the history of economic ideas. It also gives a genuine insider's account' Telegraph The past twenty years saw unprecedented growth and stability followed by the worst financial crisis the industrialised world has ever witnessed. In the space of little more than a year what had been seen as the age of wisdom was viewed as the age of foolishness. Almost overnight, belief turned into incredulity. Most accounts of the recent crisis focus on the symptoms and not the underlying causes of what went wrong. But those events, vivid though they remain in our memories, comprised only the latest in a long series of financial crises since our present system of commerce became the cornerstone of modern capitalism. Alchemy explains why, ultimately, this was and remains a crisis not of banking - even if we need to reform the banking system - nor of policy-making - even if mistakes were made - but of ideas. In this refreshing and vitally important book, former governor of the Bank of England Mervyn King - an actor in this drama - proposes revolutionary new concepts to answer the central question: are money and banking a form of Alchemy or are they the Achilles heel of a modern capitalist economy?

The New York Times bestseller "Blinder's book deserves its likely place near the top of reading lists about the crisis. It is the best comprehensive history of the episode... A riveting tale." - Financial Times One of our wisest and most clear-eyed economic thinkers offers a masterful narrative of the crisis and its lessons. Many fine books on the financial crisis were first drafts of history—books written to fill the need for immediate understanding. Alan S. Blinder, esteemed Princeton professor, Wall Street Journal columnist, and former vice chairman of the Federal Reserve Board, held off, taking the time to understand the crisis and to think his way through to a truly comprehensive and coherent narrative of how the worst economic crisis in postwar American history happened, what the government did to fight it, and what we can do from here—mired as we still are in its wreckage. With bracing clarity, Blinder shows us how the U.S. financial system, which had grown far too complex for its own good—and too unregulated for the public good—experienced a perfect storm beginning in 2007. Things started unraveling when the much-chronicled housing bubble burst, but the ensuing implosion of what Blinder calls the “bond bubble” was larger and more devastating. Some people think of the financial industry as a sideshow with little relevance to the real economy—where the jobs, factories, and shops are. But finance is more like the circulatory system of the economic body: if the blood stops flowing, the body goes into cardiac arrest. When America’s financial structure crumbled, the damage proved to be not only deep, but wide. It took the crisis for the world to discover, to its horror, just how truly interconnected—and fragile—the global financial system is. Some observers argue that large global forces were the major culprits of the crisis. Blinder disagrees, arguing that the problem started in the U.S. and was pushed abroad, as complex, opaque, and overrated investment products were exported to a hungry world, which was nearly poisoned by them. The second part of the story explains how American and international government intervention kept us from a total meltdown. Many of the U.S. government’s actions, particularly the Fed’s, were previously unimaginable. And to an amazing—and certainly misunderstood—extent, they worked. The worst did not happen. Blinder offers clear-eyed answers to the questions still before us, even if some of the choices ahead are as divisive as they are unavoidable. After the Music Stopped is an essential history that we cannot afford to forget, because one thing history teaches is that it will happen again.

Much economic advice is bogus quantification, warn two leading experts in this essential book, now with a preface on COVID-19. Invented numbers offer a false sense of security; we need instead robust narratives that give us the confidence to manage uncertainty. “An elegant and careful guide to thinking about personal and social economics, especially in a time of uncertainty. The timing is impeccable." — Christine Kenneally, New York Times Book Review Some uncertainties are resolvable. The insurance industry’s actuarial tables and the gambler’s roulette wheel both yield to the tools of probability theory. Most situations in life, however, involve a deeper kind of uncertainty, a radical uncertainty for which historical data provide no useful guidance to future outcomes. Radical uncertainty concerns events whose determinants are insufficiently understood for probabilities to be known or forecasting possible. Before President Barack Obama made the fateful decision to send in the Navy Seals, his advisers offered him wildly divergent estimates of the odds that Osama bin Laden would be in the Abbottabad compound. In 2000, no one—not least Steve Jobs—knew what a smartphone was; how could anyone have predicted how many would be sold in 2020? And financial advisers who confidently provide the information required in the standard retirement planning package—what will interest rates, the cost of living, and your state of health be in 2050?—demonstrate only that their advice is worthless. The limits of certainty demonstrate the power of human judgment over artificial intelligence. In most critical decisions there can be no forecasts or probability distributions on which we might sensibly rely. Instead of inventing numbers to fill the gaps in our knowledge, we should adopt business, political, and personal strategies that will be robust to alternative futures and resilient to unpredictable events. Within the security of such a robust and resilient reference narrative, uncertainty can be embraced, because it is the source of creativity, excitement, and profit.

This eye-opening book offers a disturbing new look at Japan's post-war economy and the key factors that shaped it. It gives special emphasis to the 1980s and 1990s when Japan's economy experienced vast swings in activity. According to the author, the most recent upheaval in the Japanese economy is the result of the policies of a central bank less concerned with stimulating the economy than with its own turf battles and its ideological agenda to change Japan's economic structure. The book combines new historical research with an in-depth behind-the-scenes account of the bureaucratic competition between Japan's most important institutions: the Ministry of Finance and the Bank of Japan. Drawing on new economic data and first-hand eyewitness accounts, it reveals little known monetary policy tools at the core of Japan's business cycle, identifies the key figures behind Japan's economy, and discusses their agenda. The book also highlights the implications for the rest of the world, and raises important questions about the concentration of power within central banks.

From the chief economic commentator for the Financial Times—a brilliant tour d’horizon of the new global economy There have been many books that have sought to explain the causes and courses of the financial and economic crisis that began in 2007. The Shifts and the Shocks is not another detailed history of the crisis but is the most persuasive and complete account yet published of what the crisis should teach us about modern economies and econom­ics. 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.

Bored with endless grandstanding and people being wise after the event? Then The Age of Instability is the one book you should read on the financial crisis. Setting the near collapse of the international financial markets and banking system in a global and historical context, Sunday Times economics editor and bestselling author David Smith looks not only at the political and economic factors that contributed to the fall of Lehmans, collapse of Iceland and disintegration of the subprime mortgage market but also at the emergence of a culture of risk and greed that made it possible to believe that greed was good and the good times would last forever. It provides an authoritative yet accessible guide to what happened, where, and when with practical suggestions for what needs to happen next.

The first book-length work on market monetarism, written by its leading scholar. Is it possible that the consensus around what caused the 2008 Great Recession is almost entirely wrong? It’s happened before. Just as Milton Friedman and Anna Schwartz led the economics community in the 1960s to reevaluate its view of what caused the Great Depression, the same may be happening now to our understanding of the first economic crisis of the 21st century. Foregoing the usual relitigating of problems such as housing markets and banking crises, renowned monetary economist Scott Sumner argues that the Great Recession came down to one thing: nominal GDP, the sum of all nominal spending in the economy, which the Federal Reserve erred in allowing to plummet. The Money Illusion is an end-to-end case for this school of thought, known as market monetarism, written by its leading voice in economics. Based almost entirely on standard macroeconomic concepts, this highly accessible text lays the groundwork for a simple yet fundamentally radical understanding of how monetary policy can work best: providing a stable environment for a market economy to flourish.

Wealthy, powerful, and potentially dangerous, hedge-find managers have emerged as the stars of twenty-first century capitalism. Based on unprecedented access to the industry, More Money Than God provides the first authoritative history of hedge funds. This is the inside story of their origins in the 1960s and 1970s, their explosive battles with central banks in the 1980s and 1990s, and finally their role in the financial crisis of 2007-9. Hedge funds reward risk takers, so they tend to attract larger-than-life personalities. Jim Simons began life as a code-breaker and mathematician, co-authoring a paper on theoretical geometry that led to breakthroughs in string theory. Ken Griffin started out trading convertible bonds from his Harvard dorm room. Paul Tudor Jones happily declared that a 1929-style crash would be 'total rock-and-roll' for him. Michael Steinhardt was capable of reducing underlings to sobs. 'All I want to do is kill myself,' one said. 'Can I watch?' Steinhardt responded. A saga of riches and rich egos, this is also a history of discovery. Drawing on insights from mathematics, economics and psychology to crack the mysteries of the market, hedge funds have transformed the world, spawning new markets in exotic financial instruments and rewriting the rules of capitalism. And while major banks, brokers, home lenders, insurers and money market funds failed or were bailed out during the crisis of 2007-9, the hedge-fund industry survived the test, proving that money can be successfully managed without taxpayer safety nets. Anybody pondering fixes to the financial system could usefully start here: the future of finance lies in the history of hedge funds.