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Global Financial Meltdown
Book

Global Financial Meltdown

How We Can Avoid The Next Economic Crisis

Colin Read
Palgrave Macmillan, 2009

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Editorial Rating

8

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  • Applicable

Recommendation

Author Colin Read writes that the purpose of his book is “to provide an economic education for the educated reader who does not have a college major or minor in economics.” The book goes a good distance toward achieving that admirable goal. This broad survey of important economic ideas has a minimum of jargon. As its hopeful subtitle suggests, the book’s major emphasis is how to avoid another global financial crisis. It is especially timely as people all over the world are trying to understand the reasons for the crisis and the roles of the different players. While it seems to have been proofread in haste, getAbstract recommends this readable book to anyone who wants a firmer, basic understanding of economics without having to get a degree in the subject.

Summary

Markets and the Economy

Financial markets first emerged during the Italian Renaissance more than 400 years ago. For much of the time since then, finance and investment activities remained the exclusive domain of the wealthy. Most investors were experts in the areas or industries where they invested. However, by the early 20th century, rising levels of prosperity enabled even ordinary citizens to become investors. In stark contrast to their predecessors, these new “consumer-investors” put money in businesses that they scarcely understood at all.

Not all consumer-investors got rich, of course. Readily available credit for U.S. stock investors made equity investment potentially more lucrative, but also more risky. Irrational investor behavior produced wild stock market swings from the early decades of the 20th century to the concluding one: Both the “Roaring ’20s” and the 1990s ended with stock market dives.

Nevertheless, U.S. market-based models for producing goods and services spread worldwide. These models generated global economic growth from three sources: increased labor productivity, greater production of relatively high-value products, and a proliferation...

About the Author

Economics and finance professor Colin Read is the dean of the School of Business and Economics at the State University of New York in Plattsburgh. A former research associate at the Harvard Joint Center for Housing Studies, he served at the Ministry of Finance in Indonesia.

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