Fault Lines: How Hidden Fractures Still Threaten the World Economy
  • Fault Lines: How Hidden Fractures Still Threaten the World Economy
  • Fault Lines: How Hidden Fractures Still Threaten the World Economy

Fault Lines: How Hidden Fractures Still Threaten the World Economy

by Raghuram G. Rajan
     
 

ISBN-10: 0691146837

ISBN-13: 9780691146836

Pub. Date: 06/07/2010

Publisher: Princeton University Press

Raghuram Rajan was one of the few economists who warned of the global financial crisis before it hit. Now, as the world struggles to recover, it's tempting to blame what happened on just a few greedy bankers who took irrational risks and left the rest of us to foot the bill. In Fault Lines, Rajan argues that serious flaws in the economy are also to blame,

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Overview

Raghuram Rajan was one of the few economists who warned of the global financial crisis before it hit. Now, as the world struggles to recover, it's tempting to blame what happened on just a few greedy bankers who took irrational risks and left the rest of us to foot the bill. In Fault Lines, Rajan argues that serious flaws in the economy are also to blame, and warns that a potentially more devastating crisis awaits us if they aren't fixed.

Rajan shows how the individual choices that collectively brought about the economic meltdown—made by bankers, government officials, and ordinary homeowners—were rational responses to a flawed global financial order in which the incentives to take on risk are incredibly out of step with the dangers those risks pose. He traces the deepening fault lines in a world overly dependent on the indebted American consumer to power global economic growth and stave off global downturns. He exposes a system where America's growing inequality and thin social safety net create tremendous political pressure to encourage easy credit and keep job creation robust, no matter what the consequences to the economy's long-term health; and where the U.S. financial sector, with its skewed incentives, is the critical but unstable link between an overstimulated America and an underconsuming world.

In Fault Lines, Rajan demonstrates how unequal access to education and health care in the United States puts us all in deeper financial peril, even as the economic choices of countries like Germany, Japan, and China place an undue burden on America to get its policies right. He outlines the hard choices we need to make to ensure a more stable world economy and restore lasting prosperity.

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Product Details

ISBN-13:
9780691146836
Publisher:
Princeton University Press
Publication date:
06/07/2010
Pages:
260
Sales rank:
923,035
Product dimensions:
6.30(w) x 9.30(h) x 1.10(d)

Table of Contents

Acknowledgments ix

Introduction 1

CHAPTER ONE: Let Them Eat Credit 21

CHAPTER TWO: Exporting to Grow 46

CHAPTER THREE: Flighty Foreign Financing 68

CHAPTER FOUR: A Weak Safety Net 83

CHAPTER FIVE: From Bubble to Bubble 101

CHAPTER SIX: When Money Is the Measure of All Worth 120

CHAPTER SEVEN: Betting the Bank 134

CHAPTER EIGHT: Reforming Finance 154

CHAPTER NINE: Improving Access to Opportunity in America 183

CHAPTER TEN: The Fable of the Bees Replayed 202

Epilogue 225

Notes 231

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