A review by balhau
The Origin of Financial Crises: Central Banks, Credit Bubbles, and the Efficient Market Fallacy by George Cooper

4.0

Another lovely book that starts with a journey through the history of monetary systems and explains the evolution, why we create the gold, then the money and finally the current complex market system. It is a very pedagogical approach and put in perspective several economic views when it takes a subject into discussion and gives a very broad set of information that are intimate related to the mechanism by which we do macro economics today. The fundamental point in this book consists in an analysis to the well known and General equilibrium theory as a theoretical model to macro economics as a reliable tool to explain the reality behind all the economy and in particular the current financial systems. The author does a good job explaining why we should be careful with the premises assumed by this theory and shows how those same premises are weak and in some cases not applicable at all. As an alternative the author shows other economic theories like the famous Minsky's financial instability hypothesis and explain the ideas and how those explain the subprime mortgage crisis. Finally the author ends with a broad analysis of the role of Central Banks and the need for regulation. The author also points for the need to these Central Banks to be independent from political forces to be able to "govern" (in the sens of the article "On governors" of James Clark Maxwell) the markets and in the end avoid the meltdown of entire economical systems through the appearance of bubbles leveraged by debt. In short I must say that the book is a must read and that is very enjoyable as well. The only prerequisite needed to enjoy this book is to want understand how reality of money works and how we are affected by that.