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free 800 page book: Bubble Economics

Here is a free 800 page book from the World Economics Association

Bubble Economics

Paul D. Egan and Philip Soos

Bubble_Economics_Egan_Soos-cover

In Bubble Economics, Paul Egan and Philip Soos explore a depressed Australia in the 1840s, 1890s and 1930s. They detail recurrent patterns of boom-bust credit and asset cycles which heralded financial instability, particularly following speculation in commercial and residential land markets.A financial stability model is put forward to predict economic downturns which is based on Georgist, post-Keynesian and behavioural finance schools of economic thought, informed by data from 1830 to 2013. The trends in Australia’s current trade settings, residential property market and banking sector are ominously similar to the key precursors to Australia’s ‘Great Depression’ of the 1890s – a recession or depression may now be imminent. Egan and Soos expose ‘rentier economics’ in the land down under and discard the dominant neoclassical paradigm, bringing a fresh perspective to the intense debate about Australia’s economic future.

Download Bubble Economics (PDF, 6.4Mb) »

  1. June 25, 2014 at 8:58 pm

    As for “Free” books, here’s one of the best on economics:
    Quote from …http://www.nytimes.com/2009/04/12/opinion/12zencey.html?pagewanted=all&_r=0
    Op-Ed Contributor
    Mr. Soddy’s Ecological Economy …

    “Soddy would not have been surprised at our current state of affairs. The problem isn’t simply greed, isn’t simply ignorance, isn’t a failure of regulatory diligence, but a systemic flaw in how our economy finances itself. As long as growth in claims on wealth outstrips the economy’s capacity to increase its wealth, market capitalism creates a niche for entrepreneurs who are all too willing to invent instruments of debt that will someday be repudiated. There will always be a Bernard Madoff or a subprime mortgage repackager willing to set us up for catastrophe. To stop them, we must balance claims on future wealth with the economy’s power to produce that wealth. How can that be done?

    Soddy distilled his eccentric vision into five policy prescriptions, each of which was taken at the time as evidence that his theories were unworkable: The first four were to abandon the gold standard, let international exchange rates float, use federal surpluses and deficits as macroeconomic policy tools that could counter cyclical trends, and establish bureaus of economic statistics (including a consumer price index) in order to facilitate this effort. All of these are now conventional practice.

    Soddy’s fifth proposal, the only one that remains outside the bounds of conventional wisdom, was to stop banks from creating money (and debt) out of nothing. Banks do this by lending out most of their depositors’ money at interest — making loans that the borrower soon puts in a demand deposit (checking) account, where it will soon be lent out again to create more debt and demand deposits, and so on, almost ad infinitum. ”
    ENTIRE BOOK, Free download…
    http://archive.org/stream/roleofmoney032861mbp/roleofmoney032861mbp_djvu.txt
    THE ROLE OF MONEY ” WHAT IT SHOULD BE,
    CONTRASTED WITH WHAT IT HAS BECOME
    By FREDERICK SODDY ; Nobel Laureate

  2. davetaylor1
    June 25, 2014 at 11:27 pm

    Well found, Lucky. The Zency article you have referenced makes the issues so clear (at least to those who know what he is talking about) that one can hardly believe Soddy is still dismissed as a nobody. The usual problem, I suppose: the signal is still being lost in the random noise. How many of us happened to read the NY Times on a particular day in 2009?

    I hope more of this blog’s 9,786 other followers will take the trouble to follow Lucky’s link and read Zency’s article in full. It’s a good deal shorter than an 800-page study of local evidence, but then, the two offer different things: the one a scientific understanding of causes which makes sense of what to do about the cumulatively significant research findings in the other.

  3. David Harold Chester
    August 20, 2014 at 12:04 pm

    Much as it is easy to put the blame on the banks, according to a wiser economist this is not the basic cause of the reason for business cycles in the economy. So even after making many of these reforms the basic problem will remain. It is due to the way that land prices are controlled and grow with time over the business cycle. Speculators in land values, with the cooperation of the banks and easy rates of interest on their morguages on what appears to be a sure thing, invest in the land that is in the development regions of towns. The tax payers money is used to develop the infrastructure so the land becomes more valuable due to its growing usefulness and productivity. The speculators meanwhile hold the land unused and this helps to inflate its price and that for land that is in use.

    The growing prices of the land first encourage speculators and those who wish to invest, because the land investment looks like a good thing. However the bubble in land prices cannot continually grow in size and when there is a ceasesion of new investors and a realization of a fall in prices and in the rush to get back investment money the market collapses.

    The solution is for what any sincere government should already kinw (but don’t) which is to tax land values so that it is not worthwhile to speculate in land that is not being used.

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