Tuesday, July 31, 2012

Crisis Economics

I recently read Crisis Economics by economist Nouriel Roubini. For financial experts and non-financial experts alike, I recommend this book to anyone looking to understand the various causes that contributed to the recent financial crisis, the policy response that likely saved the economy from a depression, and the steps that need to be taken going forward to lessen the blows from future recessions.

Roubini is often depicted in the press as Dr. Doom, but I believe that to be a mischaracterization. He simply remains concerned about certain risks that face the economy (excessive consumption in developed economies leading to public and private sector debt, incentives that encourage risk-taking and short-term thinking, currency inflexibility in Europe, over-investment and lack of consumption in China etc.) even though many are behaving as if those problems are long gone. He was one of the few guys that foretold about the impending US housing collapse before it happened, and he remains outspoken about other areas of the economy that are potential risks.

Despite the complexity of the topic, however, Roubini discusses the issues very clearly without using jargon. For this reason, I think even a beginner (e.g. someone who hasn't taken an economics course) can understand the book very well. Nevertheless, all of the topics are covered to an advanced level, so even the seasoned economist will be entertained.

What did you think of this book? Leave a comment.

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