This week's wild events have left me fielding many questions. I rely heavily on the following resources:
Charles Kindleberger, Manias, Crashes and Panics: A History of Financial Crises, 1978. I taught from Kindleberger's International Economics, the standard textbook at the time (1970s when I was teaching). After his retirement, he collected and synthesized a wealth of information about financial crises in what has become the standard work on the subject.
Charles MacKay, Extraordinary Popular Delusions and the Madness of Crowds, 1841. Covers the Mississippi Company, Tulipmania and the South Sea Bubble as well as other delusions. Key takeaway: don't trust people to be rational.Walter Bagehot, Lombard Street: A Description of the Money Market, 1873. Bagehot (pronounced “badge-it”) was a businessman who became a journalist, eventually editor of The Economist. When he wrote Lombard Street, educated men understood banks but not the banking system. This books explains well the value of a lender of last resort in a financial crisis.
Comments