The New Financial Order: Risk in the 21st Century

The New Financial Order: Risk in the 21st Century

by Robert J. Shiller
     
 

ISBN-10: 0691120110

ISBN-13: 9780691120119

Pub. Date: 07/06/2004

Publisher: Princeton University Press

In his best-selling Irrational Exuberance, Robert Shiller cautioned that society's obsession with the stock market was fueling the volatility that has since made a roller coaster of the financial system. Less noted was Shiller's admonition that our infatuation with the stock market distracts us from more durable economic prospects. These lie in the hidden

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Overview

In his best-selling Irrational Exuberance, Robert Shiller cautioned that society's obsession with the stock market was fueling the volatility that has since made a roller coaster of the financial system. Less noted was Shiller's admonition that our infatuation with the stock market distracts us from more durable economic prospects. These lie in the hidden potential of real assets, such as income from our livelihoods and homes. But these ''ordinary riches,'' so fundamental to our well-being, are increasingly exposed to the pervasive risks of a rapidly changing global economy. This compelling and important new book presents a fresh vision for hedging risk and securing our economic future.

Shiller describes six fundamental ideas for using modern information technology and advanced financial theory to temper basic risks that have been ignored by risk management institutions--risks to the value of our jobs and our homes, to the vitality of our communities, and to the very stability of national economies. Informed by a comprehensive risk information database, this new financial order would include global markets for trading risks and exploiting myriad new financial opportunities, from inequality insurance to intergenerational social security. Just as developments in insuring risks to life, health, and catastrophe have given us a quality of life unimaginable a century ago, so Shiller's plan for securing crucial assets promises to substantially enrich our condition.

Once again providing an enormous service, Shiller gives us a powerful means to convert our ordinary riches into a level of economic security, equity, and growth never before seen. And once again, what Robert Shiller says should be read and heeded by anyone with a stake in the economy.

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Product Details

ISBN-13:
9780691120119
Publisher:
Princeton University Press
Publication date:
07/06/2004
Edition description:
Reprint
Pages:
384
Product dimensions:
5.90(w) x 8.98(h) x 0.81(d)

Table of Contents

Preface
Acknowledgments
Introduction: The Promise of Economic Security1
Pt. 1Economic Risks in an Advancing World
1What the World Might Have Looked Like since 195021
2The Hidden Problem of Economic Risk32
3Why New Technology Creates Risks46
4Forty Thieves: The Many Kinds of Economic Risks58
Pt. 2How Science and Technology Create New Opportunities in Finance
5New Information Technology Applied to Risk Management69
6The Science of Psychology Applied to Risk Management82
7The Nature of Invention in Finance99
Pt. 3Six Ideas for a New Financial Order
8Insurance for Livelihoods and Home Values107
9Macro Markets: Trading the Biggest Risks121
10Income-Linked Loans: Reducing the Risks of Hardship and Bankruptcy139
11Inequality Insurance: Protecting the Distribution of Income149
12Intergenerational Social Security: Sharing Risks between Young and Old165
13International Agreements for Risk Control175
Pt. 4Deploying the New Financial Order
14Global Risk Information Databases189
15New Units of Measurement and Electronic Money202
16Making the Ideas Work: Research and Advocacy222
Pt. 5The New Financial Order as a Continuation of a Historical Process
17Lessons from Major Financial Inventions231
18Lessons from Major Social Insurance Inventions245
Epilogue: A Model of Radical Financial Innovation269
Notes277
References325
Index351

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