What do these Nobel prize winning economists have in common?

Princeton Makes. Stockholm Takes.

Princeton University Press is proud to be the publisher of these Nobel Prize-winning economists

Angus DeatonThe Great Escape jacket

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

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.


The Theory of Corporate Finance jacket2014 Jean Tirole

The Theory of Corporate Finance

Tirole conveys the organizing principles that structure the analysis of today’s key management and public policy issues, such as the reform of corporate governance and auditing; the role of private equity, financial markets, and takeovers; the efficient determination of leverage, dividends, liquidity, and risk management; and the design of managerial incentive packages.

2013 Lars Peter HansenRobustness jacket


What should a decision maker do if the model cannot be trusted? This book adapts robust control techniques and applies them to economics. By using this theory to let decision makers acknowledge misspecification in economic modeling, the authors develop applications to a variety of problems in dynamic macroeconomics.

Irrational Exuberance jacket2013 Robert J. Shiller

Irrational Exuberance

In addition to diagnosing the causes of asset bubbles, Irrational Exuberance recommends urgent policy changes to lessen their likelihood and severity—and suggests ways that individuals can decrease their risk before the next bubble bursts. No one whose future depends on a retirement account, a house, or other investments can afford not to read it.

Handbook of Experimental Economics jacket2012 Alvin E. Roth

The Handbook of Experimental Economics (Edited with John H. Kagel)

This book presents a comprehensive critical survey of the results and methods of laboratory experiments in economics:public goods, coordination problems, bargaining, industrial organization, asset markets, auctions, and individual decision making.

2012 Lloyd S. Shapley

Advances in Game Theory (AM-52) (Edited with Melvin Dresher & Albert William Tucker)

Shapley considers Cooperative Game Theory when discerning various match methods that result in stable matches. In this book, Shapley defines stable matches as no two entities that would prefer one another over their counterparts and recognizes processes to achieve these matches.

2011 Thomas J. SargentConquest of American Inflation jacket

The Conquest of American Inflation

Sargent examines two broad explanations for the behavior of inflation and unemployment in this period: the natural-rate hypothesis joined to the Lucas critique and a more traditional econometric policy evaluation modified to include adaptive expectations and learning. His purpose is not only to determine which is the better account, but also to codify for the benefit of the next generation the economic forces that cause inflation.

2010 Peter DiamondBehavioral Economics and Its Applications

Behavioral Economics and Its Applications (Edited with Hannu Vartiainen)

In this volume, some of the world’s leading thinkers in behavioral economics and general economic theory make the case for a much greater use of behavioral ideas in six fields where these ideas have already proved useful but have not yet been fully incorporated–public economics, development, law and economics, health, wage determination, and organizational economics. The result is an attempt to set the agenda of an important development in economics.

Understanding Institutional Diversity jacket

2009 Elinor Ostrom

Understanding Institutional Diversity

Concentrating primarily on the rules aspect of the IAD framework, this book provides empirical evidence about the diversity of rules, the calculation process used by participants in changing rules, and the design principles that characterize robust, self-organized resource governance institutions.

Mass Flourishing jacket2006 Edmund S. Phelps

Mass Flourishing

Phelps argues 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?

2005 Robert J. Aumann

Values of Non-Atomic Games

This book extends the value concept to certain classes of non-atomic games, which are infinite-person games in which no individual player has significance. It is primarily a book of mathematics—a study of non-additive set functions and associated linear operators.

Anticipating Correlations jacket2003 Robert F. Engle III

Anticipating Correlations:A New Paradigm for Risk Management

Engle demonstrates the role of correlations in financial decision making, and addresses the economic underpinnings and theoretical properties of correlations and their relation to other measures of dependence.

Clive W.J. Granger

Spectral Analysis of Economic Time Series (PSME-1) (with Michio Hatanaka)

Spectral Analysis of Economic Time Series expands and implements on innovative statistical methods based on Granger’s differentiating process, “cointegration”. Granger analyzes and compares short-term alterations with long-term patterns.

Identity Economics jacket2001 George A. Akerlof

Identity Economics: How Our Identities Shape Our Work, Wages, and Well-Being (with Rachel E. Kranton)

Identity Economics provides an important and compelling new way to understand human behavior, revealing how our identities–and not just economic incentives–influence our decisions.The authors explain how our conception of who we are and who we want to be may shape our economic lives more than any other factor, affecting how hard we work, and how we learn, spend, and save.

Lectures on Public Economics jacket2001 Joseph Stiglit

Lectures on Public Economics (with Anthony B. Atkinson)

The lectures presented here examine the behavioral responses of households and firms to tax changes. The book then delves into normative questions such as the design of tax systems, optimal taxation, public sector pricing, and public goods, including local public goods.

Anat Admati on the stark reality of post-2008 banking

Admati-BankersNewClothes_pbkThere are a few lessons still unlearned from the 2008 financial recession, according to Anat Admati, co-author of The Banker’s New Clothes: What’s Wrong with Banking and What to Do about it. “After such a major trauma, we want to believe all is well again,” Admati wrote in her Bloomberg piece on Monday. “But the reality in banking is different and stark.”

Admati turns her attention to former chair of the Federal Reserve, Ben Bernanke’s new book, The Courage to Act. While she applauds Bernanke for appreciating the significance of “equity capital in protecting the economy from financial shocks”, she is skeptical of the supposed progress resulting from regulations implemented by the Federal Reserve post-2008. Admati writes in Bloomberg:

A clear lesson is that banks need much more capital, specifically in the form of equity. In this area, the reforms engendered by the crisis have fallen far short. Regulators focus on “risk-weighted” and accounting-based capital ratios that, among their many flaws, rely on banks to assess the riskiness of their assets. Using off-balance-sheet accounting, derivatives and other tools, banks have become adept at manipulating these ratios. Annual stress tests aren’t much better: They employ the same flawed measures and cannot reliably predict how an actual crisis, which may come from an unexpected direction, would play out in an opaque and interconnected financial system.

Admati argues that a larger amount of equity given to banks would offer substantial benefits to society with minimal costs, halting the precarious practice of creditors allowing the largest banks in the world to borrow money under the assumption of government intervention in dire situations.

Read the rest of Admati’s analysis here .

Anat Admati is the George G. C. Parker Professor of Finance and Economics at Stanford’s Graduate School of Business.

PUP author Angus Deaton wins the 2015 Nobel Prize in Economics

The Great EscapeCongratulations to Princeton Professor Angus Deaton from his proud publisher, Princeton University Press, on his 2015 Nobel Prize in Economics.  Deaton’s 2013 PUP book received admirable notices near and far, including this one by none other than Bill Gates: “If you want to learn about why human welfare overall has gone up so much over time, you should read The Great Escape: Health, Wealth, and the Origins of Inequality.”   We couldn’t agree more.

Peter J. Dougherty

From the Nobel committee, as reported in The New York Times:

“To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices,” the committee that awarded the prize said in a statement. “More than anyone else, Angus Deaton has enhanced this understanding. By linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics and development economics.”

You can watch a Financial Times interview with Angus Deaton, where he discusses global inequality with John McDermott here.

Facebook YEAR OF BOOKS live Q&A with authors of “Portfolios of the Poor”

Collins jacketPortfolios of the Poor: How the World’s Poor Live on $2 a Day by Daryl Collins, Jonathan Morduch, Stuart Rutherford & Orlanda Ruthven is a recent choice by Mark Zuckerberg for his Year of Books project. An unusual investigation of the staggering problem of global poverty, the authors conducted year-long interviews with impoverished villagers and slum dwellers in Bangladesh, India, and South Africa. This morning the authors are taking part in a live Q&A on the Year of Books Facebook page to share the surprising and systematic methods these families used to survive on an income that is, for many, unimaginably small.

Mark Zuckerberg announced the book’s selection on his personal Facebook page with the following thoughts:

It’s mind-blowing that almost half the world — almost 3 billion people — live on $2.50 a day or less. More than one billion people live on $1 a day or less.

This book explains how these families invest their money to best support themselves.

I hope reading this provides some insight into ways we can all work to support them better as well.

You can follow the discussion here.

Paul Krugman hosting free discussion at Cooper Union with authors of THRIVE

Thrive jacketTonight, Nobel-prize-winning economist Paul Krugman will host a free public discussion at Cooper Union with Richard Layard & David M. Clark, co-authors of Thrive: How Better Mental Health Care Transforms Lives and Saves Money. Richard Layard discussed the book with Tom Keene on Bloomberg Surveillance here, and both authors answered some questions on mental health policy for the PUP blog here.

Mental illness is a leading cause of suffering in the modern world. In sheer numbers, it afflicts at least 20 percent of people in developed countries. It reduces life expectancy as much as smoking does, accounts for nearly half of all disability claims, is behind half of all worker sick days, and affects educational achievement and income. There are effective tools for alleviating mental illness, but most sufferers remain untreated or undertreated. What should be done to change this? In Thrive, Richard Layard and David Clark argue for fresh policy approaches to how we think about and deal with mental illness, and they explore effective solutions to its miseries and injustices.

Richard Layard is one of the world’s leading labor economists and a member of the House of Lords. He is the author of Happiness: Lessons from a New Science, which has been translated into twenty languages.

David M. Clark is professor of psychology at the University of Oxford. Layard and Clark were the main drivers behind the UK’s Improving Access to Psychological Therapies program.

Paul Krugman is an author and economist who teaches at Princeton, the London School of Economics and elsewhere. He won the 2008 Nobel Prize in economics. He is also an Op-Ed columnist for the New York Times.

September 29, 2015 @ 6:30 pm – 9:30 pm
The Great Hall
Foundation Building
7 E 7th St, New York, NY 10003

Please RSVP here.

An interview with Louise Fresco on “Hamburgers in Paradise”

Fresco JacketIn Louise Fresco’s new book, Hamburgers in Paradise, the term “Paradise”, in her own words, is “a metaphor that refers to the landscapes on our planet, the collective Garden of Eden which, according to some views, we have irreversibly destroyed through large scale food production.” It is a view shared by many in a world simultaneously plagued by food shortages and GMO fears. In such a climate, is there room for optimism? Fresco looks at our food situation in all its complexity, taking the stance that there is no one perfect way to produce or consume food, and that balance and trade-offs between different goals are central to any long term solution. You can see her TED talk here, and the English subtitled version to a documentary she made about the food industry here. Recently Fresco took some time to answer some questions about her book.

What’s new in this book?

LF: Human history has been one of continuous scarcity. The abundance of food that has emerged for the majority of the world population in the last decades is so unique that we have not yet learnt to deal with it. We are still scared that there will not be enough, and that we will destroy our environment. Scarcity is our default mode, and that of our bodies, hence our difficulties to balance our diets and to reduce our ecological footprint. Abundance is a triumph of science and trade; it allows us to shed our fears of shortages. But the book argues that we require new ways of thinking, to reign in our needs (for example of meat) while producing food sustainably for all, with new methods (for example through recycling or using algae). The book demonstrates in detail that there is not one perfect way to produce and consume food, but that we always have to balance the trade-offs between different goals, such as large scale production (i.e. low food prices) and biodiversity. What is best depends on our goals and our insight in unintended side effects (we may like to see free roaming chickens but they may be more prone to disease that way).

Can you explain the title Hamburgers in Paradise?

LF: The title refers to a thought experiment: if Eve were alive today, what food would she offer Adam as a temptation? Paradise as a metaphor also refers to the landscapes on our planet, the collective Garden of Eden which, according to some views, we have irreversibly destroyed through large scale food production. These semi-conscious images of a pre-Industrial and idealized past are still guiding many of our reactions to modernization. The hamburger, of course, is the iconic food that symbolizes the rise of the modern middle class, from suburban America to places like Moscow or Mumbai, as well as the critical counterforces: slow food, vegetarian and organic products. The hamburger illustrates also the adaptation to new demands: fat and salt contents have been lowered, information on calories and nutritional values are published, wrappings are made of recycled materials and advertising to children is limited. In the most recent twist of history, the hamburger becomes popular once again in upper class restaurants, dipped in liquid Nitrogen, or in a vegetarian reincarnation.

Food is the source of much confusion today, we hear so many, contradictory stories about what we must or mustn’t eat and why. What is the reason for this confusion?

LF: Food and agriculture are the basis human survival. Food conjures up strong feelings, based on individual memories, strict convictions and long traditions, especially in times of rapid modernization. Many people, even in rural areas, are hardly aware of how food is really produced and how it lands on their plates. Nearly all of us rely on others, often far away, to feed us. Ignorance and dependency make us feel vulnerable and worried about food.

But we can also turn this around: behind every meal there is a story, one that is nearly always fascinating and often complex, but always worth telling. Food connects us with the past and the future.

Is there room for optimism?

LF: With current knowledge, we can feed nine or ten billion people quite easily. This doesn’t mean that there is no world food problem. Even if enough food can be produced this is not easy and more production does not mean food reaches people automatically. The current gap between actual and attainable yields is still enormous. At the same time, agricultural research and innovation continue to be needed to tackle specific problems of animal and plant diseases, poor soils and climate variation. The application of existing knowledge is hampered by poor infrastructure, unavailability of irrigation or fertilizer, dysfunctional markets and policy.

Food shortage is more a matter of distribution than just production. Hunger is caused by poverty, so creating employment is essential. The great improvements in agricultural production since the 1970s have benefitted the urban poor more than the rural poor. These improvements involve higher yields, through better agricultural techniques such as irrigation, leading to lower food prices that benefit those who buy food (those living in cities), while farmers selling foods are at a disadvantage. Today more than 850 million people go hungry and perhaps as many as 2 billion may lack balanced nutrition. Most of the hungry live in areas of civil war or frequent natural disasters, so peace and resettlement are priorities.

There seems to be much concern about Genetically Modified Organisms, is this concern justified?

LF: This is a very complex issue about which it is impossible to generalize and about which there are many misunderstandings. For example, if cows are fed genetically modified soy bean, their milk does not become genetically modified, even if some people fear this. The modified genes and cells do not survive the gut. What the effects and risks are depends very much on what crop or animal, what genes are used for what purpose and where. Certain problems, for example diseases in banana, can only be tackled with biotechnology, a large toolkit which does not necessarily result in GMOs. There are two types of risk, for human and animal health. While we need to continue to monitor the situation, there are no indications that GM crops lead to additional food related risks in human beings or animals. So far, there are no indications of environment effects (such as insect mortality or genes “escaping “), but ecosystems are complex and difficult to monitor. Finally, there is also the issue of intellectual property rights: while a fair reward is needed for the companies developing the biotechnology or GMOs, we must also make sure that farmers and scientists and breeders elsewhere can keep access to varieties or breeds. Here the U.S. and EU legislation and traditions do not coincide.

What about chemical inputs such as fertilizer. Are we not destroying the land?

LF: Plants and animals need food just as we do. These nutrients come nearly exclusively from the soil (and through water, transported from soils elsewhere). Only very few soils can sustain production for long periods and their nutrient reserve needs to be built up through other sources of nutrients. Whilst manure from animals can be used for this, this does not solve the problem, it just means that animals have to graze somewhere from where they take up the nutrients. Almost without exception agriculture requires fertilizer to be sustainable. Fertilizer has a bad name mainly because it has been overused in the past with detrimental effects on surface water, but in itself, if wisely used, it is a blessing. More land is depleted through lack of fertilizer than is affected through its use.

Is fast food the source of all evils?

LF: Fast food is part of a complex process of transformation of society: greater mobility, work pressures, urbanization, diversification through trade, smaller and singe households, greater affluence of young, ubiquitous equipment like microwaves and fridges people all lead to out of home eating and pre-packed meals. As with all foods, it is not the individual item that is “bad” but the pattern. Eating fast food from time to time is acceptable in an otherwise healthy lifestyle. However, fast food often contains too many calories and we should be concerned if there are no other options, In so-called food deserts, neighbourhoods devoid of shops selling vegetables, fast food is often the recourse for single parents.

What type of agriculture is most sustainable?

LF: There is no blueprint for an agricultural model that fits all situations. Agriculture is the art of the location-specific and always depends on soils, climate, geography, culture and economics. Agriculture is forever changing, adapting to new consumer demands and new technology. However, using resources as efficiently as possible is essential to avoid wasting labour, water, land, fertilizer, seeds or animals as well as reducing post harvest losses in the entire value chain. Efficiency is often misunderstood as large-scale and anonymous, but it applies at all scales. No farmer can afford to waste resources, nor can we as humanity. The World will need 50% more calories in 2030.

Would the world be better off if all meat would be prohibited?

LF: No, meat is necessary for certain groups such as pregnant and lactating women, children, the elderly and sick and of course the malnourished. Meat is not only a source of proteins but also of essential nutrients such as iron and certain vitamins (B12). Humans evolved as omnivores; vegetarians, even in India, have always been a small minority. Also, there are areas in the world where nothing else can be produced but grazing land and animals. The growth in demand for meat and fish is expected to increase faster than the growth in population, especially in Asia and Africa.

However, there are major problems associated with meat production: environmental (water, emissions, production and transportation of feed) veterinary public health, human health (diseases associated with high red meat intake and overuse of antibiotics) as well as animal welfare. These can all be solved with adequate research and regulation. Reducing meat consumption through substitution of animal proteins in healthy individuals in affluent societies is part of that.

Louise O. Fresco is president of Wageningen University and Research Centre in the Netherlands. The author of several books, she is a member of the Council of Advisors for the World Food Prize and has worked extensively in developing countries for many years. She lives in Amsterdam.

Mark Zuckerberg chooses “Portfolios of the Poor” for A Year of Books

Collins jacketMark Zuckerberg is spending a year reading books and is inviting others to join him. The latest pick for A Year of Books, just announced, is Portfolios of the Poor by Daryl Collins, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven. Over 250 families in Bangladesh, India, and South Africa participated in this unprecedented study of the financial practices of the world’s poor. In selecting a story of life very bottom of the global economic order, Zuckerberg seems to suggest the particular importance of empathy for entrepreneurs and those in leadership positions.

“It’s mind-blowing that almost half the world — almost 3 billion people — live on $2.50 a day or less. More than one billion people live on $1 a day or less. This book explains how these families invest their money to best support themselves. I hope reading this provides some insight into ways we can all work to support them better as well,” he wrote on his personal Facebook page.

So far there have been 17 books chosen, and this is the third Princeton University Press title to make the list. Rational Ritual by Michael Chwe, and The Muqaddimah by Ibn Khaldun were chosen earlier this year.

Congratulations to the authors!

You can find more information on the website for Portfolios of the Poor here. A sample chapter is available here.

Martin Sandbu talks euro scapegoating and his new book “Europe’s Orphan” with the Financial Times

Has the euro  been wrongfully scapegoated for the eurozone’s economic crisis? In his new book, Europe’s Orphan: The Future of the Euro and the Politics of Debt, leading economist Martin Sandbu says that it has, arguing that the problems lie not with the euro itself, but with decisions made by policymakers. Sandbu was recently interviewed by Martin Wolf, Financial Times chief economics commentator. You can watch the video here:

Introducing the new video trailer for PHISHING FOR PHOOLS by Robert Shiller & George Akerlof

Phishing for Phools jacketDo you have a weakness? Of course you do. Which means, according to Nobel Prize-winning economists George Akerlof and Robert Shiller, you have probably been “phished” for a “phool.”

We tend to think of phishing as the invisible malevolence that led our grandparents to wire money to Nigeria, or inspired us to click on a Valentine’s day link that promised, “someone loves you,” and then promptly crashed our hard drive. But more generally understood, “phishing” is inseparable from the market economy of everyday life. As long as there is profit to be made, psychological weaknesses will be exploited. For example, overly optimistic information results in false conclusions and untenable purchases in houses and cars. Health clubs offer overpriced contracts to well-intentioned, but not terribly athletic athletes. Credit cards feed dramatic levels of debt. And phishing occurs in financial markets as well: Think of the legacy of mischief at work in the financial crises from accounting fraud through junk bonds and the marketing of derivatives.

Ever since Adam Smith, the central teaching of economics has been that the invisible hand of free markets provides us with material well-being. In Phishing for Phools, Akerlof and Shiller challenge this insight, arguing that markets are far from being essentially benign and don’t always create the greater good. In fact, markets are inherently filled with tricks and traps.

We are thrilled to introduce this new video trailer in which Robert Shiller talks about his new book with George Akerlof, Phishing for Phools:


PHISHING FOR PHOOLS and CLIMATE SHOCK included in the long list for FT & McKinsey Business Book of the Year Award

Climate ShockPhishing for Phools jacketThe long list for the FT & McKinsey Business Book of the Year Award has been published, and we’re thrilled to see that two Princeton University Press titles have been included. Nobel Prize winners George Akerlof and Robert Shiller’s new book on on economic trickery, Phishing for Phools, and Gernot Wagner and Martin Weitzman’s examination of the global crisis of climate change, Climate Shock have both been listed in the top 15. Other titles appearing include Ashlee Vance’s biography of Elon Musk, Martin Ford’s study of jobs and automation, The Rise of the Robots, and Anne-Marie Slaughter’s take on how to narrow the gender gap, Unfinished Business.

Read more about this year’s long listed titles and the other books recognized during the award’s 11-year history here.

The shortlist of up to six finalists will be published on September 22nd.  The £30,000 prize will be awarded on November 17th in New York.

Find sample chapters of Climate Shock and Phishing for Phools here and here respectively.



What does the Ancient Greek economy have to say about the current debt crisis? Josiah Ober shares his thoughts

Ober jacketJosiah Ober, author of The Rise and Fall of Classical Greece, has conducted groundbreaking research into the ancient Greek economy, showing that contrary to popular opinion, democracy and economic growth went hand in hand. But are today’s Greeks the “trained and knowledgeable democratic citizens” who built and supported the institutions that served as the foundation for Greek civilization? Ober says now is the time to stop pointing fingers and to think very seriously about the link between democracy and long-term economic stability. He recently discussed Ancient Greece’s answer to the financial crisis in The Daily Beast:

Ancient Greece’s Answer to the Financial Crisis

Greece’s real deficit? Knowledgeable citizens and accountable institutions.

The Greek debt crisis is playing out as if, as Henry Ford said, history is bunk. But if we look to history, we immediately see that the stakes are much higher and the problems are much deeper than either the current Greek leadership or the current EU leadership is willing to admit.

Just before the Greek people went to the polls to decide their future by voting in a miserably mismanaged referendum, George Katrougalos, Greece’s deputy minister for administrative reforms, announced that “The whole question has moved now from the field of economics to the field of democracy.” Meanwhile, the EU leaders, who apparently regard the Union as little more than an accounting device, seem incapable of thinking about the geo-strategic long term. But, like the United States of America, the EU is more than an accounting device. A democratic federation is an attempted solution to the problem of conjoining democracy, prosperity, and security in a dangerous, mutable world. America’s Founders knew that. Europe’s technocrats seem not to.

Read the rest here.

An excerpt from the book ran on PBS’s Making $ense blog yesterday, and Stanford ran a terrific feature on Ober’s research. His work has been cited in recent days by in Washington Post, Quartz, and New York Times articles that look to the Greek past to understand the current debt crisis.

Recently, Ober took the time to talk with us about his book and the reasons for Greece’s flourishing. You can read that interview here.

What are Wall Street’s smartest people reading? Lasse Pedersen’s EFFICIENTLY INEFFICIENT

Pedersen jacketLasse Pedersen’s new book, Efficiently Inefficient, a look at the key trading strategies used by hedge funds, just made two lists of top investment books. The Wall Street Journal included it in a list of “the books Wall Street’s smartest people think you should read this summer”, where it was recommended by Torsten Slok, ‎chief international economist at Deutsche Bank. ETF.com also gave the book a shout out, naming it one of the “must read books for serious investors”.

Lasse Pedersen, a finance professor at Copenhagen Business School and New York University’s Stern School of Business, and a principal at AQR Capital Management, is determined to show how markets really work in a world where they are neither perfectly efficient nor completely inefficient. So what exactly does he mean by the contradiction in terms “efficiently inefficient”? From ETF.com:

Imperfectly Efficient

Regarding the book’s title, Pedersen explains: “Markets cannot be perfectly efficient and always reflect all information. If they were perfect, no one would have any incentive to collect information and trade on it, and then how could markets become efficient in the first place? Markets also cannot be so inefficient that making money is very easy because, in that case, hedge funds and other active investors would have an incentive to trade more and more.”

Efficiently Inefficient includes an array of interviews with leading hedge fund managers, including Lee Ainslie, Cliff Asness, Jim Chanos, Ken Griffin, David Harding, John Paulson, Myron Scholes, and George Soros. Free problem sets are available online on Pedersen’s website. The introduction is available for download here.