I am so at home in Dublin, more than any other city, that I feel it has always been familiar to me. It took me years to see through its soft charm to its bitter prickly kernel - which I quite like too.

Home Uncategorized That Clinking Clanking Sound

That Clinking Clanking Sound

Antoin E Murphy
The Ascent of Money: A Financial History of the World, by Niall Ferguson, Allen Lane, 442 pp, £25, ISBN: 978-1846141065 Niall Ferguson is an erudite historian who has written a classic biography on the Rothschild family and so has the credentials to write a major work on money. Money, finance and the financial crises that we have experienced in recent times are worthy topics for further historical exploration. Ferguson’s area of study is one that has not been overworked by the academic community. It is striking to note how few articles have been devoted to analysing the anatomies of financial crises in economic journals dominated by a multiplicity of articles on arcane and peripheral issues. This will of course change, albeit a little late for those looking for information on why markets rise and crash. The situation is somewhat similar with respect to books on the subject. When the most recent financial crisis started to develop in the summer of 2007 the search for books dealing with previous financial crises produced meagre pickings. Charles Kindleberger’s important book Manias, Panics and Crashes (1978) was dusted off shelves. Many media commentators rushed to read John Kenneth Galbraith’s The Great Crash (1971), a stylishly written work which unfortunately does not contain a great deal of substance. Keynes’s The General Theory of Employment, Interest and Money (1936) was consulted again and chapter 12 on “The State of Long Term Expectations” quoted extensively. Milton Friedman and Anna Schwartz’s A Monetary History of the United States 1867-1960 (1963) was also reread by certain cognoscenti, most notably Ben Bernanke, the chairman of the Federal Reserve System. After that the cupboard containing books dealing with recent financial crises was quite bare, leaving some writers searching for inspiration to reach back to that highly successful but massively inaccurate nineteenth century potboiler Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay. The reason for the shortage of books on financial crises could be that in recent years many economic writers lost interest in such matters because first, some of them believed that the keys to controlling crises had been discovered through Friedman and Schwartz’s work on the causes of the Great Depression and therefore there was no real need to worry; second, other economists, those belonging to the new classical macroeconomics approach, did not believe in the possibility of financial bubbles. The latter group, fully paid up subscribers to the theory of rational expectations, are of the view that homo…

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