|  | Authors: Charles P. Kindleberger, Robert Aliber
Creator: Robert Solow
Publisher: Wiley
List Price: $19.95
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Seller: treebeardbooks
Rating:  57 reviews
Sales Rank: 2780
Languages: English (Original Language), English (Unknown), English (Published)
Media: Paperback
Edition: 5
Pages: 336
Number Of Items: 1
Shipping Weight (lbs): 1
Dimensions (in): 8.8 x 6.1 x 0.8
ISBN: 0471467146
Dewey Decimal Number: 338.542
EAN: 9780471467144
ASIN: 0471467146
Publication Date: October 4, 2005
Availability: Usually ships in 1-2 business days
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| Customer Reviews:
Showing reviews 26-30 of 57
 Difficult Read, Need A Masters Degree March 9, 2007
Benson (Sydney, Australia)
4 out of 14 found this review helpful
Anything less than an honour student may have trouble. Fairly heavy reading, even for myself (B.Business Finance & Mathematics). Suited to Economics majors.
A classic -- but showing its age September 24, 2006
A. Howell (New York, NY USA)
5 out of 6 found this review helpful
This book probably deserves the title of "classic", being one of the first attempts by an economist to popularize for a broader audience a theory of speculative financial bubbles that takes into account "modern" macroeconomic theory (e.g. Keynes and the monetarists). The book identifies many common themes among some of the great financial manias in history, providing along the way some entertaining anecdotes and commentary.
Nevertheless, classic or not, I was a bit disapointed with the book. After 30 years and several editions it seems to be showing its age, with numerous uneven and unconvincing attempts to update the text to the late 20th century. I also found that the many historical examples were not well told or clearly differentiated and tended to blend together. Chancellor's "Devil take the Hindmost" seems to do a better job at providing a history of the great speculative bubbles. Most importantly, Kindelberger writes alot about what goverbnments should do after crashes occur, but he does not help much with a useful framework for spotting bubbles as they emerge -- or understanding how they tend to unravel.
 Great Scholarly work but how does an investor make a buck? February 25, 2006
Norman Hamlin (San Diego)
4 out of 11 found this review helpful
I don't recommend this book for a general business audience. It does a fine job of chronicling various panics. I was hoping for a book that focused on causes of panics and manias and how to identify one when you are in it.
 How money supply is expanded December 8, 2005
Golden Lion (North Ogden, Ut United States)
8 out of 71 found this review helpful
The Monetarist need a central bank. Without a central bank availablity of money necessary too cover checks written was impossible to balance. Human behavior is impossible to predict. For example, maybe the consumer will leave his money in the bank or maybe, he would withdraw it. The fluctuation of money inventory can not be predicted: too much inventory is unprofitable and not enough inventory ondemand causes default on surrender issues. So, maintaining the sufficient level of funds available would be impossible because demand was impossible to predict.
Monetary economics had two schools of thought "currency school" and "banking school". Currency school focused on profits from high interest yields. Banking school focused on a central bank. The banking school prevailed.
The monetarist needed a way to manipulate the money supply. A private central bank called the Federal Reserve was formed in 1844 for the purposes of providing an unlimit source of credit.
The Fed controls the money supply. Congress gave the Fed power to expand or contract the money supply. If the Fed wants to increase the amount of money in circulation, the Fed can simply print it. Printed bills are a small portion of the money supply. Today, there are at least nine forms of money.
The most influencial way for the fed to increase the money supply is too buy government fixed-income securities. How does the Fed pay for these securities? They print money and buy the security. This is called inflation. Banks recognize this fact of inflation and raise interest rates. The Fed realizes the money supply has diluted and raises the overnight borrowing rate. Individuals and business recognize the money supply has become diluted, as prices increase and the dollar buys less. When the Fed buy the government securities,it puts money in the hands of the public banks; these banks turn around and fractionalize a portion of the money, as reserves, and loan out an 10 fold increase in loan money. The expansion of credit heats up the economy, growth surges, and job increase.
To contract the money supply, the Fed does the opposite, it sells the government securities. The affect is too soak up liquidity, dry up credit, and contract the money supply. As money become tighter, interest rates rise matching demand for the scarce money, operation budgets tighten, and jobs decrease.
The third function of a central bank was to ensure sufficient funds existed for customer requesting a surrender of funds the bank maintained. Fractional reserves needs a guarantee and the fed provided that guarantee against a money panic with its unlimited ability to print money.
Speculation leads to disaster and must be borne by the central bank. December 7, 2005
D. Nishimoto (USA)
0 out of 4 found this review helpful
Speculation excesses are referred too as mania and revulsion from these excesses take the form of crisis, crashes, or panic which are historically common. The excess speculation builds as investor seize new opportunities for profits and are overdone. Hyman Minsky describes these new opportunities as the result of displacement. Displacement are events leading up to a crisis, such as, outbreak or end of war, bumper harvest or crop failure, widespread adoption of an invention, or some political event. Displacement must be a significant size. Displacement brings opportunities for profit and increased demand causes price to rise. Banks artificially increase supply without proportional increases in demand by expanding the money supply that demand would have generated. The money supply expansion is notoriously unstable. Feedback fuels Euphoria for price increase; the Euphoria turns investment from really valuable products to delusional ones. Boom is characterized as rising interest rates, as Banks threaten discredit and hedge against the speculation by raising rates; trading velocity increases and the velocity of circulation and turnover ratios rise; and stock prices increases. Boom is fed by expansion caused by bank credit; credit increases the money supply and destablizes the investment.
Once the excessive character of the upswing is realized, the financial system experiences a distress and then rushes to reverse expansion resembling panic: real or financial assets converting to money, premature repayment of debt, and prices crashes in commodities. Minsky explains that selling at the top falters because there is not enough money too sell out at the top.
Revulsion of the commodity halts banks from lending on the commodity as collateral, this is called discredit. Discredit leads the panic as people crowd to get out the door. People may stop trying to get out the door, if price falls and the commodity looks like a bargin, trade is cut and price declines stop hemmoraging, or a lender convinces the market money will become available. When the economy becomes depressed, Banks view borrowing as a risky prospect and may prefer to put their money in government securities.
Banks fail when too many borrowers default on their loans and the borrowers collateral is not enough to cover the debt. Inflation and deflation should not affect long term growth. When prices fall a corresponding drop in wages also may occur. Employment and purchasing power remain neutral. Wo, comes unto the borrower. The borrower suffers because the debts are fixed. The creditor benefits because expense money is returned in debt payments and this money can buy more, a value added function. Depression is characterized by a reluctance for banks to loan money, discreditation of the commodities to be used as collateral decreases the amount of loanable money the bank is willing to extend to the borrower, and tight money slows growth.
The world markets operate as if men are rationale over the long run. Irrationality may exist as economic actors choose the wrong economic model, fail to account for a particular piece of information, or fail despite a rational expectation as lags between stimulus and reaction fail to meet expectation. Composite fallacy confuses the truth, as investors believe that the whole is more than the sum of its parts. Speculation leads to disaster and must be borne by the central bank.
Showing reviews 26-30 of 57
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