Getting it Wrong

How Faulty Monetary Statistics Undermine the Fed, the Financial System, and the Economy

Business & Finance, Economics, Econometrics, Finance & Investing, Finance
Cover of the book Getting it Wrong by William A. Barnett, The MIT Press
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: William A. Barnett ISBN: 9780262300568
Publisher: The MIT Press Publication: December 16, 2011
Imprint: The MIT Press Language: English
Author: William A. Barnett
ISBN: 9780262300568
Publisher: The MIT Press
Publication: December 16, 2011
Imprint: The MIT Press
Language: English

A leading economist contends that the recent financial crisis was caused not by the failure of mainstream economics but by corrupted monetary data constructed without reference to economics.

Blame for the recent financial crisis and subsequent recession has commonly been assigned to everyone from Wall Street firms to individual homeowners. It has been widely argued that the crisis and recession were caused by “greed” and the failure of mainstream economics. In Getting It Wrong, leading economist William Barnett argues instead that there was too little use of the relevant economics, especially from the literature on economic measurement. Barnett contends that as financial instruments became more complex, the simple-sum monetary aggregation formulas used by central banks, including the U.S. Federal Reserve, became obsolete. Instead, a major increase in public availability of best-practice data was needed. Households, firms, and governments, lacking the requisite information, incorrectly assessed systemic risk and significantly increased their leverage and risk-taking activities. Better financial data, Barnett argues, could have signaled the misperceptions and prevented the erroneous systemic-risk assessments.

When extensive, best-practice information is not available from the central bank, increased regulation can constrain the adverse consequences of ill-informed decisions. Instead, there was deregulation. The result, Barnett argues, was a worst-case toxic mix: increasing complexity of financial instruments, inadequate and poor-quality data, and declining regulation.

Following his accessible narrative of the deep causes of the crisis and the long history of private and public errors, Barnett provides technical appendixes, containing the mathematical analysis supporting his arguments.

View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart

A leading economist contends that the recent financial crisis was caused not by the failure of mainstream economics but by corrupted monetary data constructed without reference to economics.

Blame for the recent financial crisis and subsequent recession has commonly been assigned to everyone from Wall Street firms to individual homeowners. It has been widely argued that the crisis and recession were caused by “greed” and the failure of mainstream economics. In Getting It Wrong, leading economist William Barnett argues instead that there was too little use of the relevant economics, especially from the literature on economic measurement. Barnett contends that as financial instruments became more complex, the simple-sum monetary aggregation formulas used by central banks, including the U.S. Federal Reserve, became obsolete. Instead, a major increase in public availability of best-practice data was needed. Households, firms, and governments, lacking the requisite information, incorrectly assessed systemic risk and significantly increased their leverage and risk-taking activities. Better financial data, Barnett argues, could have signaled the misperceptions and prevented the erroneous systemic-risk assessments.

When extensive, best-practice information is not available from the central bank, increased regulation can constrain the adverse consequences of ill-informed decisions. Instead, there was deregulation. The result, Barnett argues, was a worst-case toxic mix: increasing complexity of financial instruments, inadequate and poor-quality data, and declining regulation.

Following his accessible narrative of the deep causes of the crisis and the long history of private and public errors, Barnett provides technical appendixes, containing the mathematical analysis supporting his arguments.

More books from The MIT Press

Cover of the book The Acceleration of Cultural Change by William A. Barnett
Cover of the book In the Bubble by William A. Barnett
Cover of the book Extremism by William A. Barnett
Cover of the book Disclosing the World by William A. Barnett
Cover of the book What Do Science, Technology, and Innovation Mean from Africa? by William A. Barnett
Cover of the book Play Matters by William A. Barnett
Cover of the book Felt Time by William A. Barnett
Cover of the book Applied State Estimation and Association by William A. Barnett
Cover of the book Sherrie Levine by William A. Barnett
Cover of the book Operations Rules by William A. Barnett
Cover of the book Rogue Archives by William A. Barnett
Cover of the book Inside the Fed by William A. Barnett
Cover of the book Power and Care by William A. Barnett
Cover of the book Mapping Israel, Mapping Palestine by William A. Barnett
Cover of the book A Mark of the Mental by William A. Barnett
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy