Nobel Prize Winner Robert Shiller on “The World at One”

Shiller_auAs you may have seen on our blog yesterday, Robert J. Shiller, a professor at Yale University, has won the 2013 Nobel Prize in Economics along with Eugene Fama and Lars Peter Hansen.

Shiller is the author of several PUP books, including Irrational Exuberance, The New Financial Order, The Subprime Solution, Animal Spirits, co-written with fellow Nobelist George Akerlof, and his most recent book,  Finance and the Good Society, which was published just last year.

Recently, Shiller was interviewed on “The World at One” about his Nobel Prize and about some of his books. The program can be found here and Shiller’s interview starts about 41 minutes in.

We’re sure this is just the first of many interviews for him and the other winners, so stay tuned!

Game Theory

Game Theory: An Introduction by Steven Tadelis “Steve Tadelis’s Game Theory is an ideal textbook for advanced undergraduates, and great preparation for graduate work. It provides a clear, self-contained, and rigorous treatment of all the key concepts, along with interesting applications; it also introduces key technical tools in a straightforward and intuitive way.”–Drew Fudenberg, Harvard University

Game Theory:
An Introduction
by Steven Tadelis

This comprehensive textbook introduces readers to the principal ideas and applications of game theory, in a style that combines rigor with accessibility. Steven Tadelis begins with a concise description of rational decision making, and goes on to discuss strategic and extensive form games with complete information, Bayesian games, and extensive form games with imperfect information. He covers a host of topics, including multistage and repeated games, bargaining theory, auctions, rent-seeking games, mechanism design, signaling games, reputation building, and information transmission games. Unlike other books on game theory, this one begins with the idea of rationality and explores its implications for multiperson decision problems through concepts like dominated strategies and rationalizability. Only then does it present the subject of Nash equilibrium and its derivatives.

Game Theory is the ideal textbook for advanced undergraduate and beginning graduate students. Throughout, concepts and methods are explained using real-world examples backed by precise analytic material. The book features many important applications to economics and political science, as well as numerous exercises that focus on how to formalize informal situations and then analyze them.

Endorsements

Table of Contents

Errata Sheet

Student’s Solution Manual

Sample this book:

Preface [PDF]

Chapter 1 [PDF]

Request an examination copy.

 

Strategy & Business Gives “Mass Flourishing” A Thumbs Up

Mass FlourishingTheodore Kinni of Strategy & Business reviewed Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change this week, saying:

“I…find his values-driven view of national prosperity fascinating—and applicable to corporate and personal prosperity. If innovation and the prosperity it yields stem from the values to which we subscribe as individuals, organizations, and nations, it stands to reason that we should be paying a great deal of attention to the particular values we adopt and espouse.”
― Theodore Kinni, Strategy-Business.com

To check out the full article, click here.
In this book, Nobel Prize-winning economist Edmund Phelps draws on a lifetime of thinking to make a sweeping new argument about what makes nations prosper–and why the sources of that prosperity are under threat today. Why did prosperity explode in some nations between the 1820s and 1960s, creating not just unprecedented material wealth but “flourishing”–meaningful work, self-expression, and personal growth for more people than ever before? Phelps makes the case that the wellspring of this flourishing was modern values such as the desire to create, explore, and meet challenges. These values fueled the grassroots dynamism that was necessary for widespread, indigenous innovation. Most innovation wasn’t driven by a few isolated visionaries like Henry Ford; rather, it was driven by millions of people empowered to think of, develop, and market innumerable new products and processes, and improvements to existing ones. Mass flourishing–a combination of material well-being and the “good life” in a broader sense–was created by this mass innovation.

Yet indigenous innovation and flourishing weakened decades ago. In America, evidence indicates that innovation and job satisfaction have decreased since the late 1960s, while postwar Europe has never recaptured its former dynamism. The reason, Phelps argues, is that the modern values underlying the modern economy are under threat by a resurgence of traditional, corporatist values that put the community and state over the individual. The ultimate fate of modern values is now the most pressing question for the West: will Western nations recommit themselves to modernity, grassroots dynamism, indigenous innovation, and widespread personal fulfillment, or will we go on with a narrowed innovation that limits flourishing to a few?

A book of immense practical and intellectual importance, Mass Flourishing is essential reading for anyone who cares about the sources of prosperity and the future of the West.

Edmund Phelps was the 2006 Nobel Laureate in economics. He is director of the Center on Capitalism and Society at Columbia University. His many books include Designing Inclusion, Rewarding Work, and Seven Schools of Macroeconomic Thought.

FINANCIAL TIMES/GOLDMAN SACHS: The Great Escape is longlisted for the 2013 Business Book of the Year Award

ANGUS DEATON - The Great Escape:
Health, Wealth, and the Origins of Inequality

Longlisted for the 2013 Business Book of the Year Award, Financial Times/Goldman Sachs

Angus Deaton’s The Great Escape traces advances in wealth and health that offer hope of an exit from historic human inequality.

Committee statement about the award:

“This annual Award, promoted by the Financial Times Limited (“FT”) and the Goldman Sachs Group, Inc (“GS”), aims to identify the book that provides the most compelling and enjoyable insight into modern business issues, including management, finance and economics. The winner will receive an award of £30,000, and shortlisted authors will receive £10,000 each. A shortlist of up to 6 titles will be announced in early autumn, and the winner will be announced at an Award Dinner in London in November 2013 (the “Award Ceremony”). Submissions are invited from publishers or bona fide imprints based in any country (“Publishers”).”–Financial Times

Learn more about the 2013 Business Book of the Year Award on the Financial Times website: FT.com PDF

The Great Escape: Health, Wealth, and the Origins of Inequality by Angus DeatonThe world is a better place than it used to be. People are wealthier and healthier, and live longer lives. Yet the escapes from destitution by so many have left gaping inequalities between people and between nations. In The Great Escape, Angus Deaton–one of the foremost experts on economic development and on poverty–tells the remarkable story of how, starting 250 years ago, some parts of the world began to experience sustained progress, opening up gaps and setting the stage for today’s hugely unequal world. Deaton takes an in-depth look at the historical and ongoing patterns behind the health and wealth of nations, and he addresses what needs to be done to help those left behind.

Deaton describes vast innovations and wrenching setbacks: the successes of antibiotics, pest control, vaccinations, and clean water on the one hand, and disastrous famines and the HIV/AIDS epidemic on the other. He examines the United States, a nation that has prospered but is today experiencing slower growth and increasing inequality. He also considers how economic growth in India and China has improved the lives of more than a billion people. Deaton argues that international aid has been ineffective and even harmful. He suggests alternative efforts–including reforming incentives to drug companies and lifting trade restrictions–that will allow the developing world to bring about its own Great Escape.

Demonstrating how changes in health and living standards have transformed our lives, The Great Escape is a powerful guide to addressing the well-being of all nations.

Angus Deaton is the Dwight D. Eisenhower Professor of Economics and International Affairs in the Woodrow Wilson School of Public and International Affairs and the Economics Department at Princeton University. His many books include The Analysis of Household Surveys and Economics and Consumer Behavior. He is a past president of the American Economic Association.

Endorsement:

“There is nobody better than Angus Deaton to explain why our lives are longer, healthier, and more prosperous than those of our great-grandparents. The story he tells is much more than an inexorable march of progress–it has also been unequal, uneven, and incomplete, and at each step, politics has played a defining role. This is a must-read for anybody interested in the wealth and health of nations.”–Daron Acemoglu, coauthor of Why Nations Fail

“At once engaging and compassionate, this is an uplifting story by a major scholar.”–Paul Collier, author of The Bottom Billion

“Magisterial and superb.”–William Easterly, author of The White Man’s Burden

The Great Escape tells the two biggest stories in history: how humanity got healthy and wealthy, and why some people got so much healthier and wealthier than others. Angus Deaton, one of the world’s leading development economists, takes us on an extraordinary journey–from an age when almost everyone was poor and sick to one where most people have escaped these evils–and he tells us how the billion still trapped in extreme poverty can join in this great escape. Everyone who wants to understand the twenty-first century should read this book.”–Ian Morris, author of Why the West Rules–for Now

Angus Deaton, author of The Great Escape: Health, Wealth, and the Origins of Inequality


About Angus Deaton:
  • Expertise: health, wellbeing, economic development, household surveys, the analysis of household behavior (especially at the microeconomic level), poverty in India and around the world
  • Dwight D. Eisenhower Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs and the Economics Department at Princeton University
  • Holds both American and British citizenship
  • Corresponding Fellow of the British Academy, and a Fellow of the American Academy of Arts and Sciences
  • Awarded the BBVA Foundation Frontiers of Knowledge Award in 2012
  • Was President of the American Economic Association in 2009
  • First recipient of the Society’s Frisch Medal in 1978
  • Holds a B.A. (1967), M.A. (1971), and Ph.D (1974) from Cambridge University
  • Author of The Great Escape: Health, Wealth, and the Origins of Inequality


Awards:

  • BBVA Foundation Frontiers of Knowledge Award in Economics, Finance, and Management, 2012
  • Honorary Doctor of Economics, University of Cyprus, 2012
  • Honorary Doctor of Science in Social Science, Edinburgh University, 2011
  • Hicks Lecture, Economics, Oxford, 2011
  • Stone Lecture, Department of Economics, Cambridge, 2010
  • Foundation Lecture, Fitzwilliam College, Cambridge, 2010
  • Corresponding Fellow of the Royal Society of Edinburgh, 2010
  • Distinguished Fellow, American Economic Association, 2010
  • President, American Economic Association, 2009
  • Honorary Fellow of Fitzwilliam College, Cambridge, May 2009
  • John Kenneth Galbraith Award, Agricultural and Applied Economics Association Foundation, July 2009
  • Honorary Doctor of Letters, University of St. Andrews, June 2008

To read more about Angus Deaton, visit his Author Spotlight biography: http://blog.press.princeton.edu/angus-deaton-2/

CasePlace features The Bankers’ New Clothes on their list of “engaging and thought-provoking material”

CasePlace -- New at CasePlace 
 
CasePlace.org is a library of teaching resources designed for business school faculty—although other faculty, and student and professional users are welcome too! The site is intended primarily to help faculty incorporate environmental, social and ethical topics into their teaching on business and management. 
 
CasePlace provides an array of teaching materials from a variety of publishers, all of which have been pre-screened for quality and focus on mainstream business issues and incorporate ethical, social, environmental, values-based and governance issues as well. 
 
To view this week’s list of engaging material, please visit CasePlace.org’s weekly selection here: http://www.caseplace.org/d.asp?d=6910


The Bankers' New Clothes: What's Wrong with Banking and What to Do about It by Anat Admati & Martin HellwigThe Bankers’ New Clothes:
What’s Wrong with Banking and What to Do about It

Anat Admati & Martin Hellwig

What is wrong with today’s banking system? The past few years have shown that risks in banking can impose significant costs on the economy. Many claim, however, that a safer banking system would require sacrificing lending and economic growth. The Bankers’ New Clothes examines this claim and the narratives used by bankers, politicians, and regulators to rationalize the lack of reform, exposing them as invalid.

Admati and Hellwig argue we can have a safer and healthier banking system without sacrificing any of the benefits of the system, and at essentially no cost to society. They show that banks are as fragile as they are not because they must be, but because they want to be–and they get away with it. Whereas this situation benefits bankers, it distorts the economy and exposes the public to unnecessary risks. Weak regulation and ineffective enforcement allowed the buildup of risks that ushered in the financial crisis of 2007-2009. Much can be done to create a better system and prevent crises. Yet the lessons from the crisis have not been learned.

“Ms. Admati and Mr. Hellwig, top-notch academic financial economists, do understand the complexities of banking, and they helpfully slice through the bankers’ self-serving nonsense. Demolishing these fallacies is the central point of The Bankers’ New Clothes.”–John Cochrane, Wall Street Journal

Admati and Hellwig seek to engage the broader public in the debate by cutting through the jargon of banking, clearing the fog of confusion, and presenting the issues in simple and accessible terms. The Bankers’ New Clothes calls for ambitious reform and outlines specific and highly beneficial steps that can be taken immediately.

BOOK FACT FRIDAY – The Federal Reserve & Ben S. Bernanke

k9928“The Federal Reserve was founded 1914, and concerns about both macroeconomic stability and financial stability motivated the decision of Congress and President Woodrow Wilson to create it. After the Civil War and into the early 1900s, there was no central bank, so any kind of financial stability functions that could not be performed by the Treasury had to be done privately.” -Ben S. Bernanke, from chapter one of The Federal Reserve and the Financial Crisis

In 2012, Ben Bernanke, chairman of the U.S. Federal Reserve, gave a series of lectures about the Federal Reserve and the 2008 financial crisis, as part of a course at George Washington University on the role of the Federal Reserve in the economy. In this unusual event, Bernanke revealed important background and insights into the central bank’s crucial actions during the worst financial crisis since the Great Depression. Taken directly from these historic talks, The Federal Reserve and the Financial Crisis offers insight into the guiding principles behind the Fed’s activities and the lessons to be learned from its handling of recent economic challenges.

Ben S. Bernanke is chairman of the U.S. Federal Reserve. He has served as chairman of the President’s Council of Economic Advisors and as a member of the Board of Governors of the Federal Reserve. Before his time in public service he was a professor of economics at Princeton University. His many books include Essays on the Great Depression and Inflation Targeting (both Princeton).

The Federal Reserve and the Financial Crisis
by Ben S. Bernanke

We invite you to read chapter one online at: http://press.princeton.edu/chapters/s9928.pdf

Why Our Banking System is Broken–and the Reforms Needed to Fix It

j9929[1]What is wrong with today’s banking system? The past few years have shown that risks in banking can impose significant costs on the economy. Many claim, however, that a safer banking system would require sacrificing lending and economic growth. The Bankers’ New Clothes examines this claim and the narratives used by bankers, politicians, and regulators to rationalize the lack of reform, exposing them as invalid. Anat Admati and Martin Hellwig argue we can have a safer and healthier banking system without sacrificing any of the benefits of the system, and at essentially no cost to society.

Learn more about it from Anat Admati’s interview from NPR’s Morning Edition:
http://n.pr/YwxWQK
Anat Admati argues that banks carry too much debt and have too little equity.

We invite you to read a book excerpt at npr.org at:
http://n.pr/16xGA8Q

The Bankers’ New Clothes:
What’s Wrong with Banking and What to Do about It
by Anat Admati & Martin Hellwig

“Crucial . . .”–Jim Surowiecki, NewYorker.com

“Ms. Admati and Mr. Hellwig, top-notch academic financial economists, do understand the complexities of banking, and they helpfully slice through the bankers’ self-serving nonsense. Demolishing these fallacies is the central point of The Bankers’ New Clothes.”–John Cochrane, Wall Street Journal

We also invite you to try your luck and enter for a chance to win a copy of The Bankers’ New Clothes: What’s Wrong with Banking & What to Do about It at Goodreads:
http://bit.ly/ZNAI66

The Great Rebalancing Review in The Wall Street Journal

The Wall Street Journal published a book review of The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy by Michael Pettis. The reviewer calls Pettis a “brilliant economic thinker” and gives a good background of the financial situation in China and why it needs to be rebalanced. If you are not quite sure what the book is about or what exactly is going on with the Chinese economy and why it is important at all, this book review is a great place to start.

A Banking Paper Tiger

China Development Bank underwrote a massive stadium in Loudi, Hunan Province—a city that lacks a professional sports team.

China’s econoPettis_GreatRebalancing_S13my sometimes seems the work of miracles: three decades of economic growth, with GDP compounding at an annual rate of around 10%; the world’s highest levels of savings and investment; vast trade surpluses, which feed the largest foreign-exchange reserves in history. The financial system has played a key role in delivering these economic feats, and no single institution within it has been more important than China Development Bank. “Understand CDB,” Henry Sanderson and Michael Forsythe write in “China’s Superbank,” “and you understand the core of China’s state capitalism.”

This so-called policy bank, founded less than two decades ago, boasts a larger loan book than J.P. Morgan ChaseJPM +3.41% . Over the past 15 years, CDB has lent trillions of dollars to finance China’s urbanization policy. More recently, it has dished out vast sums across the globe to secure China’s long-term energy supplies. Hugo Chávez, whose country has been the largest single foreign recipient of CDB’s loans, proclaims his financial benefactor as the bank “with the most money in the world.”

Read the FULL review at The Wall Street Journal online.

Admati on CBSNews.com’s Moneywatch

Anat Admati appeared on CBSNews.com’s Moneywatch to discuss the problems with the banking system and possible solutions to remedy the problems. Admati is co-author of The Bankers’ New Clothes, a forthcoming book that not only critiques big banks but also gives them advice to fix their mistakes before it is too late.

Also, read the accompanying article on CBSNews.com.

Admati on Fox Business Network

Anat Admati appeared on Fox Business Network’s Money with Melissa Francis on Tuesday to discuss the government’s regulations for the financial sector. Admati is co-author of The Bankers’ New Clothes: What’s Wrong with Banking and What to Do About It which examines the current banking system problems and how to fix them in clearly defined terms.

Watch the full interview here.

Additionally The New Yorker, Bloomberg Business Week, and Business Insider all discuss the financial situation and possible solutions as laid out by Admati and Hellwig in The Banker’s New Clothes. Admati and Hellwig say that “higher equity requirements would therefore alleviate the problem of banks being too big, too interconnected, or too political to fail. Not only would banks be less likely to fail, they would bear more of their own losses should they incur losses.” James Pethokoukis for Business Insider agrees and sums up that “capping bank size, limiting bank activities, higher equity capital requirements — all tools in the toolbox for eliminating the crony capitalist subsidy of the US financial system by government.”

Read the articles about The Banker’s New Clothes:

Anat Admati interview on Nightly Business Report

Anat Admati was interviewed on PBS’s Nightly Business Report on Tuesday, February 11th to talk about the size and safety of banks, and her new book The Bankers’ New Clothes. Watch the interview below.

If this video is not working, please visit the Nightly Business Report site.

Also, tune into Fox Business’s Money with Melissa Francis TONIGHT at 5:00 pm for another interview with Admati.

Stanford finance prof Anat Admati discusses her new book, with Martin Hellwig, THE BANKERS’ NEW CLOTHES

Stanford finance and economics professor Anat Admati discusses her new book, with Martin Hellwig, THE BANKERS’ NEW CLOTHES: What’s Wrong with Banking and What to Do about It, out in March, with the Stanford Graduate School of Business.

Follow Professor Admati on her popular Twitter feed @anatadmati