“You have to understand people first before you can understand how to devise an economic system for them” argues Robert J Shiller, the Yale economics professor and Nobel laureate. He chooses five books that explore who we fundamentally are, as human beings, and how that will determine the shape of a successful capitalism.
Bank Runs, Deposit Insurance and Liquidity (Journal of Political Economy, Vol. 91, No. 3, June 1983)
by Douglas Diamond and Philip Dybvig
Private and Public Supply of Liquidity (Journal of Political Economy, Vol. 106, No. 1, February 1998)
by Bengt Holmstrom and Jean Tirole
The Prudential Regulation of Banks
by Mathias Dewatripont and Jean Tirole
Credit Cycles (Journal of Political Economy, Vol. 105, No. 2, April 1997)
by Nobuhiro Kiyotaki and John Moore
Leverage Cycles and the Anxious Economy (American Economic Review, Vol. 98, No. 4, September 2008)
by Ana Fostel and John Geanakoplos
The 2007 Nobel Economics Prize winner says that, contrary to popular perception, economic theory did a good job of predicting the financial crisis, it’s just that no one was paying any attention. Eric Maskin talks us through four journal articles and one book on ‘economic theory and the financial crisis.’
Paul Krugman, Nobel prize-winning economist, Op-Ed columnist for the New York Times, and Emeritus Professor of Economics and International Affairs at Princeton, discusses the books that most influenced his formation as a liberal economist.