The Origin of Financial Crises

Jacket text for The Origin of Financial Crises

The Origin of Financial Crises provides a compelling analysis of the forces behind today's economic crisis. In a series of disarmingly simple arguments George Cooper challenges the core principles of today's economic orthodoxy, explaining why financial markets do not obey the efficient market principles described in today's economic textbooks but are instead inherently unstable and habitually crisis prone.

The author describes the evolution of our modern monetary system, explaining along the way how financial instability emerged and why this instability required the development of central banking. Cooper claims that misguided faith in the power of free markets has led some central banks to neglect their core role of managing the financial system and instead caused them to pursue policies which promote a series of ever more violent boom-bust cycles. The Origin of Financial Crises calls for a radical shift in central bank strategy the abandonment of inflation targeting and a paradigm shift in our attitude to economic policy.

Along the way the reader will learn about the fundamentals of inflation and discover what policy makers can learn from the designers of the Eurofighter jet. They will also learn how an obscure paper on steam engines, written in 1868, by the inventor of colour photography shows us how to avoid repeating recent monetary policy mistakes.

Uniquely, The Origin of Financial Crises presents tangible policy proposals aimed at helping break out of the seemingly endless procession of damaging boom-bust cycles.

Chapter headings for The Origin of Financial Crises

Preface

1. Introduction

2. Efficient Markets & Central Banks?

3. Money, Banks & Central Banks

4. Stable and Unstable Markets

5. Deceiving the Diligent

6. On (Central Bank) Governors

7. Minsky Meets Mandelbrot

8. Beyond the Efficient Market Fallacy

9. Concluding Remarks

About George Cooper

Dr. George Cooper is a principal of Alignment Investors a division of BlueCrest Capital Management Ltd. He was born in Sunderland and studied at Durham University. George has worked as a fund manager at Goldman Sachs and as strategist for Deutsche Bank and JPMorgan. He lives in London with his wife and two children.

More about George Cooper

Reviews for The Origin of Financial Crises

"A must read...Cooper's book is by far the most cogent and reasoned of the modern-day 'credit excess' school."
- The Economist

"A well written book...Cooper's most novel doctrine is that investors do not have to be irrational to generate bubbles."
- Financial Times

"Awesomely lucid"
- Dominic Lawson, The Independent