The New Financial Order: Risk in the 21st Century

Paperback (Print)
Buy New
Buy New from BN.com
$26.85
Buy Used
Buy Used from BN.com
$23.50
(Save 41%)
Item is in good condition but packaging may have signs of shelf wear/aging or torn packaging.
Condition: Used – Good details
Used and New from Other Sellers
Used and New from Other Sellers
from $2.99
Usually ships in 1-2 business days
(Save 92%)
Other sellers (Paperback)
  • All (28) from $2.99   
  • New (14) from $9.60   
  • Used (14) from $2.99   

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.

Read More Show Less

Editorial Reviews

Philadelphia Inquirer
It is an understatement to say Shiller's book raises complex political, legal and economic questions. Some will probably never happen. But The New Financial Order is still worth a look. It casts some long-standing social problems in a new light, and it puts some fascinating ideas on the table.
— Andrew Cassel
Philadelphia Inquirer - Andrew Cassel
It is an understatement to say Shiller's book raises complex political, legal and economic questions. Some will probably never happen. But The New Financial Order is still worth a look. It casts some long-standing social problems in a new light, and it puts some fascinating ideas on the table.
The Independent - Jonathan Davis
The good news, on Professor Shiller's analysis, is that it is now possible to conceive and construct trade-able indices that will allow insurers to offer protection against such things as industrial decline and demographically-induced pension shortfalls. If we all knew such insurance was available, we could afford more risks with our choice of career, to the benefit of the economy. Creativity is the lifeblood of capitalist economics. Emotional worries about the risk of unemployment are one of the biggest threats to continued innovation. . . . The data and technology to make a market in such things exists. All that is lacking, Professor Shiller says, is the will to make them a commercial reality.
New York Times - Hal R. Varian
Unemployment is up. Housing sales are weakening. Oil prices continue to fluctuate, and the stock market remains volatile. There's no doubt we live in risky times, yet our tools for managing risk are limited. . . . How could we design markets to help manage such risks? This challenging problem is examined in Robert J. Shiller's book. . . . Here Mr. Shiller turns to the role of financial institutions in managing risk. . . . It is said that behind every successful man is a surprised mother-in-law. If so, there could be quite a large market for such securities.
Financial Times - Philip Coggan
Livelihood insurance. Income-linked loans. Inequality insurance. These are some of the bold and imaginative ideas suggested by Robert Shiller. . . . [W]hile the practical barriers to some of Shiller's suggestions may be immense, there is much that is stimulating in this book. If one were to look 30 years ahead, it would be foolish to bet against at least one of his ideas being widely adopted.
Los Angeles Times - Tom Petruno
Millions of individual investors could have saved themselves enormous sums of money, and an equivalent amount of grief, by taking Robert Shiller's advice three years ago. . . . Now Shiller is back with another book that also holds warnings of sorts—this time about societal wealth inequalities and the need to mitigate what he calls 'the risks that rally matter in our lives.' If Irrational Exuberance was a sober assessment of a situation that was well known yet widely defended—the nation's infatuation with stocks—The New Financial Order is a dissertation on problems many people don't know they have. . . . Shiller, however, has let his imagination run in this book.
From the Publisher

Robert J. Shiller, Co-Winner of the 2013 Nobel Prize in Economics

Co-Winner of the 2005 Kulp-Wright Book Award, American Risk and Insurance Association, Inc.

Winner of the 2003 Business Book Award, Financial Times Germany/getAbstract

Winner of the 2004 Wilmott Book Of The Year Award for General Finance

Honorable Mention for the 2003 Award for Best Professional/Scholarly Book in Economics, Association of American Publishers

"Shiller's ambition is exhilarating, and gives his work something that most business books lack; a deep sense of how economic ideas might transform people's everyday lives."--The New Yorker

"The New Financial Order [is] . . . easily accessible and pleasantly utopian."--Washington Post

"Certain to be controversial."--Publishers Weekly

"It is an understatement to say Shiller's book raises complex political, legal and economic questions. Some will probably never happen. But The New Financial Order is still worth a look. It casts some long-standing social problems in a new light, and it puts some fascinating ideas on the table."--Andrew Cassel, Philadelphia Inquirer

"While [his] ideas may sound unfamiliar--even radical--Shiller's reasoned case recalls earlier financial innovations such as stock and futures markets, life and unemployment insurance, and earned income tax credits. The earlier innovations addressed the financial and risk management needs of individuals and societies in the same way Shiller proposes for his concepts."--Library Journal

"The good news, on Professor Shiller's analysis, is that it is now possible to conceive and construct trade-able indices that will allow insurers to offer protection against such things as industrial decline and demographically-induced pension shortfalls. If we all knew such insurance was available, we could afford more risks with our choice of career, to the benefit of the economy. Creativity is the lifeblood of capitalist economics. Emotional worries about the risk of unemployment are one of the biggest threats to continued innovation. . . . The data and technology to make a market in such things exists. All that is lacking, Professor Shiller says, is the will to make them a commercial reality."--Jonathan Davis, The Independent

"There are financial markets that help us manage fluctuations in corporate profitability and commodity prices. But there are no markets to help manage risks from fluctuations in labor markets and housing markets, even though these have a much bigger impact on most peoples' financial security. How could we design markets to help manage such risks? This challenging problem is examined in Robert J. Shiller's book The New Financial Order."--Hal R. Varian, New York Times

"[A] though-provoking book."--Risk

"Livelihood insurance. Income-linked loans. Inequality insurance. These are some of the bold and imaginative ideas suggested by Robert Shiller. . . . [W]hile the practical barriers to some of Shiller's suggestions may be immense, there is much that is stimulating in this book. If one were to look 30 years ahead, it would be foolish to bet against at least one of his ideas being widely adopted."--Philip Coggan, Financial Times
"[Shiller's] ideas are striking, to put it mildly. . . . Mr. Shiller himself is doubtful that all his ideas will be adopted. But his book, which contains some fascinating history, is at the very least thought-provoking."--The Economist

"Unemployment is up. Housing sales are weakening. Oil prices continue to fluctuate, and the stock market remains volatile. There's no doubt we live in risky times, yet our tools for managing risk are limited. . . . How could we design markets to help manage such risks? This challenging problem is examined in Robert J. Shiller's book. . . . Here Mr. Shiller turns to the role of financial institutions in managing risk. . . . It is said that behind every successful man is a surprised mother-in-law. If so, there could be quite a large market for such securities."--Hal R. Varian, New York Times

"Millions of individual investors could have saved themselves enormous sums of money, and an equivalent amount of grief, by taking Robert Shiller's advice three years ago. . . . Now Shiller is back with another book that also holds warnings of sorts--this time about societal wealth inequalities and the need to mitigate what he calls 'the risks that rally matter in our lives.' If Irrational Exuberance was a sober assessment of a situation that was well known yet widely defended--the nation's infatuation with stocks--The New Financial Order is a dissertation on problems many people don't know they have. . . . Shiller, however, has let his imagination run in this book."--Tom Petruno, Los Angeles Times

"In a non-technical way, Shiller engages readers in a wide-ranging consideration of risk and introduces novel ideas concerning the ways people identify, view, and guard against risk. . . . This topic may seem to appeal to a limited audience, but the author's style enables him to broach what might have been tedious topics in an entertaining way."--Choice

Washington Post
The New Financial Order [is] . . . easily accessible and pleasantly utopian.
New York Times
Unemployment is up. Housing sales are weakening. Oil prices continue to fluctuate, and the stock market remains volatile. There's no doubt we live in risky times, yet our tools for managing risk are limited. . . . How could we design markets to help manage such risks? This challenging problem is examined in Robert J. Shiller's book. . . . Here Mr. Shiller turns to the role of financial institutions in managing risk. . . . It is said that behind every successful man is a surprised mother-in-law. If so, there could be quite a large market for such securities.
— Hal R. Varian
Risk
[A] though-provoking book.
Financial Times
Livelihood insurance. Income-linked loans. Inequality insurance. These are some of the bold and imaginative ideas suggested by Robert Shiller. . . . [W]hile the practical barriers to some of Shiller's suggestions may be immense, there is much that is stimulating in this book. If one were to look 30 years ahead, it would be foolish to bet against at least one of his ideas being widely adopted.
— Philip Coggan
Los Angeles Times
Millions of individual investors could have saved themselves enormous sums of money, and an equivalent amount of grief, by taking Robert Shiller's advice three years ago. . . . Now Shiller is back with another book that also holds warnings of sorts—this time about societal wealth inequalities and the need to mitigate what he calls 'the risks that rally matter in our lives.' If Irrational Exuberance was a sober assessment of a situation that was well known yet widely defended—the nation's infatuation with stocks—The New Financial Order is a dissertation on problems many people don't know they have. . . . Shiller, however, has let his imagination run in this book.
— Tom Petruno
Choice
In a non-technical way, Shiller engages readers in a wide-ranging consideration of risk and introduces novel ideas concerning the ways people identify, view, and guard against risk. . . . This topic may seem to appeal to a limited audience, but the author's style enables him to broach what might have been tedious topics in an entertaining way.
The New Yorker
Shiller's ambition is exhilarating, and gives his work something that most business books lack; a deep sense of how economic ideas might transform people's everyday lives.
The Independent
The good news, on Professor Shiller's analysis, is that it is now possible to conceive and construct trade-able indices that will allow insurers to offer protection against such things as industrial decline and demographically-induced pension shortfalls. If we all knew such insurance was available, we could afford more risks with our choice of career, to the benefit of the economy. Creativity is the lifeblood of capitalist economics. Emotional worries about the risk of unemployment are one of the biggest threats to continued innovation. . . . The data and technology to make a market in such things exists. All that is lacking, Professor Shiller says, is the will to make them a commercial reality.
— Jonathan Davis
The Economist
[Shiller's] ideas are striking, to put it mildly. . . . Mr. Shiller himself is doubtful that all his ideas will be adopted. But his book, which contains some fascinating history, is at the very least thought-provoking.
Andrew Cassel
The New Financial Order is still worth a look. It cast some longstanding social problems in a new light, and it puts some fascinating ideas on the table.
Philadelphia Inquirer
New Yorker
Audaciously taking well-established economic ideas to their logical extreme, Shiller calls for a revolution in the management of risk, both individual and collective. While markets are currently used to hedge away a small number of risks -- health problems, rising commodity prices, volatile currencies -- Shiller believes that they could also limit risks like falling house prices and rising unemployment. In the future, countries might buy and sell futures contracts based on their own G.D.P., and individuals could insure themselves against choosing the wrong profession. There is a mad-scientist quality to some of these proposals, and the technical and political obstacles to their implementation seem insurmountable. Still, Shiller's ambition is exhilarating, and gives his work something that most business books lack: a deep sense of how economic ideas might transform people's everyday lives.
Publishers Weekly
Shiller is best known for arguing, as he did in Irrational Exuberance, that stock market movements do not reflect underlying economic reality and that the volatility of the market makes the financial system unstable. It is therefore a surprise to find him advocating vast expansion of financial derivative markets to reduce the economic risk faced by individuals and countries. According to Shiller, governments should swap 10% or more of their gross domestic product with other countries and administer income swaps among entire generations. Individuals should manage risk by trading in new financial instruments based on the lifetime income of their profession, the value of homes in their area or economic statistics like the unemployment rate or inflation rate. Money, he says, will be replaced by "indexed units of account" tied to things like wage rates and commodity prices. People will carry transponders to report on their every activity, with the results stored in "global risk information databases," containing all personal information, including genetic data but protected against unauthorized access. In this way, the government can eliminate the underground economy and tax evasion and individuals will enjoy more economic security. The author admits people don't think they want this additional security, but he advocates "psychological framing" to change their viewpoint. The book is certain to be controversial. Some will see a visionary, high-tech combination of the best of capitalism and socialism. Others will be reminded of Brave New World and 1984, with privacy, freedom and adventure traded for a totalitarian mediocrity founded on constant monitoring and propaganda. (Apr. 2) Copyright 2003 Reed Business Information.
Library Journal
What's a world to do with markets run amuck? Yale economist Shiller has some ideas. He's spent years studying economic risk management, taking time out to warn us of our infatuation with a bloated stock market in his prescient Irrational Exuberance. Shiller sees risk management as the supreme aspiration of finance, with greater democratization of wealth as its goal. He looks to more ordinary and overlooked forms of wealth as key to economic stability, proposing six major ideas to form a new framework of risk management. The first three ideas, such as livelihood and home equity insurance, are the bailiwick of financial institutions. The remaining three are the responsibility of governments, such as inequality insurance and intergenerational social security. While the ideas may sound unfamiliar-even radical-Shiller's reasoned case recalls earlier financial innovations such as stock and futures markets, life and unemployment insurance, and earned income tax credits. The earlier innovations addressed the financial and risk management needs of individuals and societies in the same way Shiller proposes for his concepts. Recommended for all business collections.-Carol J. Elsen, Univ. of Wisconsin, Whitewater Copyright 2003 Reed Business Information.
Read More Show Less

Product Details

  • ISBN-13: 9780691120119
  • Publisher: Princeton University Press
  • Publication date: 7/6/2004
  • Edition description: Reprint
  • Pages: 384
  • Sales rank: 797,503
  • Product dimensions: 5.90 (w) x 8.98 (h) x 0.81 (d)

Meet the Author

Robert J. Shiller is the Stanley B. Resor Professor of Economics at Yale University. He is the author of "Macro Markets", which won the first annual Paul A. Samuelson Award of TIAA-CREF, and "Irrational Exuberance" (Princeton), which was a "New York Times" bestseller.
Read More Show Less

Read an Excerpt

The New Financial Order

Risk in the 21st Century
By Robert J. Shiller

Princeton University Press

Copyright © 2004 Robert J. Shiller
All right reserved.

ISBN: 0691120110

Chapter One

THE PROMISE OF ECONOMIC SECURITY

WALL STREET, along with the City of London and other world financial centers, has served as the liveliest laboratory for new ideas in all of capitalism. Modern finance-not only securities and banking but also insurance and public finance-grows out of powerful theories, both mathematical and psychological, and has produced economic inventions of the greatest utility. Despite some awful financial scandals that surface from time to time, these inventions really work, most of the time. The inventions work because the fundamental ideas are sound and because finance professionals have learned to apply them effectively to real people, with all their psychological biases and quirks.

The primary subject matter of finance is the management of risks. Finance looks at the various forms of human disappointments and economic suffering as risks to which probabilities can be attached. Finance poses arrangements that reduce these disappointments and blunt their impact on individuals by dispersing their effects among large numbers of people. Finance helps us realize our dreams by enabling creators and innovators to pursue their ideas without bearing all of the risksthemselves and encourages them to take great risks for good purposes, as when entrepreneurs start new companies financed by venture capitalists.

Unfortunately, the insights of finance have been applied in only a limited way. Risk sharing has been used primarily for certain narrow kinds of insurable risks, such as stock market crashes or hurricanes, or for managing the risks of conventional investments, such as diversifying investment portfolios or hedging commodity risks, benefits that often accrue mainly to the already-well-off members of our society. Finance has substantially neglected the protection of our ordinary riches, our careers, our homes, and our very abilities to be creative as professionals.

We need to democratize finance and bring the advantages enjoyed by the clients of Wall Street to the customers of Wal-Mart. We need to extend finance beyond our major financial capitals to the rest of the world. We need to extend the domain of finance beyond that of physical capital to human capital, and to cover the risks that really matter in our lives. Fortunately, the principles of financial management can now be expanded to include society as a whole. And if we are to thrive as a society, finance must be for all of us-in deep and fundamental ways.

Democratizing finance means effectively solving the problem of gratuitous economic inequality, that is, inequality that cannot be justified on rational grounds in terms of differences in effort or talent. Finance can thus be made to address a problem that has motivated utopian or socialist thinkers for centuries. Indeed, financial thinking has been more rigorous than most other traditions on how to reduce random income disparities.

Equipped with modern digital technology, we can now make these financial solutions a reality. Right now we are witnessing an explosion of new information systems, payment systems, electronic markets, online personal financial planners, and other technologically induced economic innovations, and consequently much in our economy will be changed within just a few years. Almost all of our economy will be transformed within just a few decades. This new technology can do cheaply what once was expensive by systematizing our approach to risk management and by generating vast new repositories of information that make it possible for us to disperse risk and contain hazard.

Society can achieve a greater democratization of finance and stabilization of our economic lives through radical financial innovation. We must make this happen, given the economic uncertainty of our future at a time of global change and given the problems and inadequacies of today's financial arrangements. This book presents ideas for a new financial order, a new financial capitalism, and a new economic infrastructure, and further describes how such ideas can realistically be developed and implemented.

Incentives for Great Works without Moral Hazard

Financial arrangements exist to limit the inhibitions that fear of failure places on our actions and to do this in such a way that little moral hazard is created. Moral hazard occurs when financial arrangements encourage people to engage in destructive rather than productive acts, such as phony work done only to impress investors, wanton spending, or accounting malfeasance.

An entrepreneur may feel discouraged from starting an exciting new business because the risk of failure is too high. Modern financial arrangements can often solve this problem. For instance, this entrepreneur might find a venture capital firm that will agree to bear the risks, paying the entrepreneur a salary yet providing the entrepreneur some incentive for inspired work by offering shares in the upside if the company does well. The risk that might have prevented the entrepreneur from ever launching the business seems to disappear. Actually, the risk does not disappear, but its effects virtually disappear as the risks to the individual business are blended into large international portfolios where they are diversified away to almost nothing among the ultimate bearers of the risk, the international investors. International portfolio managers from Kabuto-Cho to Dalal Street to Piazza Affari to Avenida Paulista each take on some of this entrepreneur's risk, but as less than a millionth of their total portfolio-so small a part of their portfolios that they do not feel any of this entrepreneur's risk. The entrepreneur is now protected, at virtually no cost to anyone, and can launch an exciting new business without fear. Thus do financial arrangements foster individual creativity and achievement. This is the essential wisdom of finance and its principle of diversification.

As noted above, this inspirational effect of risk management on the entrepreneur can work very well if the venture capital firm is careful to avoid moral hazard, that is, incentives for the entrepreneur to burn down the plant or to pursue flashy opportunities that have only the appearance of potential for success, to postpone dealing with problems for fear of revealing them to others, or to continue too long in an enterprise that is clearly failing.

Finance has not been perfect in containing moral hazard-witness the recent Wall Street scandals in the United States. But it would be absurd to junk the system because of a few failures. We should instead adapt and extend finance's insights by applying its essential wisdom to the management of economic risks faced by everyone, and similarly spread the payoffs to everyone. Financial institutions can be strengthened to short-circuit fiascoes like that at Enron Corporation, where moral hazard escaped the controls, where top management, using some clever financial innovation as a foil, dishonestly ran off with the money at the expense of their employees.

Six Ideas for a New Financial Order

In this book I present six fundamental ideas for a new risk management infrastructure. The first three are intended primarily for the private sector: insurance, financial markets, and banking, respectively. The risk management concepts in these three ideas are the same, but they are applied to different risk management industries. Each industry-insurance, financial markets, and banking-has evolved its own methods of dealing with moral hazard, defining contracts, and selecting clients. At a time of fundamental innovation in risk management, it is prudent to build on these methods, respecting each industry's unique body of knowledge and extending and democratizing finance through them.

The next three ideas are designed primarily for development by the government, both through taxation and social welfare and through agreements with other countries. Government has a natural role in risk management because long-term risk management requires the stability of law, because most individuals have limited ability to construct appropriate long-term risk contracts, because fundamental institutions must be managed in the public interest, and because major international agreements require coordination with an array of government policies.

The first idea is to extend the purview of insurance to cover long-term economic risks. Livelihood insurance would protect against long-term risks to individuals' paychecks. In contrast to life insurance, which was invented at a time when deaths of young adults with dependents were much more common than they are today, livelihood insurance would protect against currently very significant risks-the uncertainties in our livelihoods that unfold over many years. Home equity insurance would protect the economic value of the home but would go far beyond today's homeowners' policies by protecting not just against specific risks to homes such as fires but also against all risks that impinge on the economic value of homes. In the form offered here, first proposed by my colleague Allan Weiss and me in 1994, the problem of moral hazard is dealt with by tying the insurance contracts to indexes of real estate prices.

The second idea for a new financial order is for macro markets, which I first proposed in my 1992 Clarendon Lectures at Oxford University and in my 1993 book, and that has been a campaign of mine ever since. It envisions large international markets for long-term claims on national incomes and occupational incomes as well as for illiquid assets such as real estate. Some of these markets could be far larger in terms of the value of the risks traded than anything the world has yet experienced, dwarfing today's stock markets. Even a market for the combined gross domestic products (GDPs) of the entire world, a market for the sum total of everything of economic value, should be established. These markets would be potentially more important in the risks they deal with than any financial markets today, and they would remove pressures and volatility from our overheated stock market. Individual and institutional investors could buy and sell macro securities as they do stocks and bonds today.

The third idea is income-linked loans. Banks and other lending institutions would provide loans that are contingent on incomes to individuals, corporations, and governments. The loan balance would automatically be reduced if income falls short of expectations. Income-linked loans would effectively allow borrowers to sell shares in their future incomes and in income indexes corresponding to their own incomes. Such loans would provide protection against the hardship and bankruptcy that afflicts so many borrowers today.

The fourth idea is inequality insurance, which is designed to address definitively, within a nation, the serious risk that income in the future will be distributed among people far less equally than it now is, that the rich will get richer and the poor poorer. It reframes the progressive income tax structure so that over time it fixes the amount of inequality rather than fixing arbitrary tax brackets.

The fifth idea is intergenerational social security, which would reframe social security to be more truly a social insurance system, allowing genuine and complete intergenerational risk sharing. Intergenerational social security's defining characteristic would be a plan to pool the risks that different generations hold, risks that today are primarily dealt with only informally and then only to a limited extent within the extended family.

The sixth idea is international agreements to manage risks to national economies. These unprecedented agreements among governments of nations would resemble private financial deals, but they would surpass such deals in scope and horizon.

Beyond these six ideas for risk management, this book proposes components of a new economic information infrastructure: new global risk information databases (GRIDs) to provide the information that would allow effective risk management, and indexed units of account, new units of measurement and electronic money for better negotiating risks.

Some Scenes from the New Financial Order

Picture vast international markets that trade major macroeconomic aggregates such as the total outputs of countries such as the United States, Japan, Paraguay, and Singapore, or indexes of single-family home prices both in cities-from New York to Paris to Sydney-and in regions, such as shoreline properties on the Riviera or agricultural property in the corn belt or the rubber plantations of Indonesia. Portfolio investors will be able to take positions in a wide array of such markets with little cost. International markets for human capital will emerge as well for occupations from medical and scientific professions to the careers of actors and performers to common labor. These markets will facilitate the creation of livelihood insurance policies on every major career and job category, and home equity insurance policies on the value of everyone's home. Massive electronic databases made accessible by user-friendly designs will enable people everywhere to engage these markets to manage their real risks.

As these markets transform our appreciation of risks, our concepts and patterns of thought will change accordingly. People will set prices in light of the prices in these markets; countries will make international agreements that parallel some of the risk management afforded in these markets and will similarly revise their welfare and social security systems. Our economies will run more efficiently because these markets provide the means to control our risks. The presence of these new markets will make it easier for firms to offer livelihood insurance, home equity insurance, and income-linked loans to individuals.

Our fundamental risks will thus be insured against, hedged, diversified, making for a safer world. By lightening the burden of risk, a new democratic finance will encourage all of us to be more venturesome, more inspired in our activities.

As a thought experiment, consider a young woman from India, living in Chicago, who wants to be a violinist. She finds it worrisome to borrow the money for her training given that her future income as a musician is so uncertain. But new financial technology enables her to borrow money online that need not be fully repaid if an index of future income of violinists turns out to be disappointing. The loan makes it easier for her to go into her favored career by limiting her risk because if it turns out that musicians' careers are not as lucrative as expected, then she will not need to repay as much of the loan.



Continues...


Excerpted from The New Financial Order by Robert J. Shiller Copyright © 2004 by Robert J. Shiller. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Read More Show Less

Table of Contents

Preface
Acknowledgments
Introduction: The Promise of Economic Security 1
Pt. 1 Economic Risks in an Advancing World
1 What the World Might Have Looked Like since 1950 21
2 The Hidden Problem of Economic Risk 32
3 Why New Technology Creates Risks 46
4 Forty Thieves: The Many Kinds of Economic Risks 58
Pt. 2 How Science and Technology Create New Opportunities in Finance
5 New Information Technology Applied to Risk Management 69
6 The Science of Psychology Applied to Risk Management 82
7 The Nature of Invention in Finance 99
Pt. 3 Six Ideas for a New Financial Order
8 Insurance for Livelihoods and Home Values 107
9 Macro Markets: Trading the Biggest Risks 121
10 Income-Linked Loans: Reducing the Risks of Hardship and Bankruptcy 139
11 Inequality Insurance: Protecting the Distribution of Income 149
12 Intergenerational Social Security: Sharing Risks between Young and Old 165
13 International Agreements for Risk Control 175
Pt. 4 Deploying the New Financial Order
14 Global Risk Information Databases 189
15 New Units of Measurement and Electronic Money 202
16 Making the Ideas Work: Research and Advocacy 222
Pt. 5 The New Financial Order as a Continuation of a Historical Process
17 Lessons from Major Financial Inventions 231
18 Lessons from Major Social Insurance Inventions 245
Epilogue: A Model of Radical Financial Innovation 269
Notes 277
References 325
Index 351
Read More Show Less

Customer Reviews

Be the first to write a review
( 0 )
Rating Distribution

5 Star

(0)

4 Star

(0)

3 Star

(0)

2 Star

(0)

1 Star

(0)

Your Rating:

Your Name: Create a Pen Name or

Barnes & Noble.com Review Rules

Our reader reviews allow you to share your comments on titles you liked, or didn't, with others. By submitting an online review, you are representing to Barnes & Noble.com that all information contained in your review is original and accurate in all respects, and that the submission of such content by you and the posting of such content by Barnes & Noble.com does not and will not violate the rights of any third party. Please follow the rules below to help ensure that your review can be posted.

Reviews by Our Customers Under the Age of 13

We highly value and respect everyone's opinion concerning the titles we offer. However, we cannot allow persons under the age of 13 to have accounts at BN.com or to post customer reviews. Please see our Terms of Use for more details.

What to exclude from your review:

Please do not write about reviews, commentary, or information posted on the product page. If you see any errors in the information on the product page, please send us an email.

Reviews should not contain any of the following:

  • - HTML tags, profanity, obscenities, vulgarities, or comments that defame anyone
  • - Time-sensitive information such as tour dates, signings, lectures, etc.
  • - Single-word reviews. Other people will read your review to discover why you liked or didn't like the title. Be descriptive.
  • - Comments focusing on the author or that may ruin the ending for others
  • - Phone numbers, addresses, URLs
  • - Pricing and availability information or alternative ordering information
  • - Advertisements or commercial solicitation

Reminder:

  • - By submitting a review, you grant to Barnes & Noble.com and its sublicensees the royalty-free, perpetual, irrevocable right and license to use the review in accordance with the Barnes & Noble.com Terms of Use.
  • - Barnes & Noble.com reserves the right not to post any review -- particularly those that do not follow the terms and conditions of these Rules. Barnes & Noble.com also reserves the right to remove any review at any time without notice.
  • - See Terms of Use for other conditions and disclaimers.
Search for Products You'd Like to Recommend

Recommend other products that relate to your review. Just search for them below and share!

Create a Pen Name

Your Pen Name is your unique identity on BN.com. It will appear on the reviews you write and other website activities. Your Pen Name cannot be edited, changed or deleted once submitted.

 
Your Pen Name can be any combination of alphanumeric characters (plus - and _), and must be at least two characters long.

Continue Anonymously

    If you find inappropriate content, please report it to Barnes & Noble
    Why is this product inappropriate?
    Comments (optional)