Fixing global finance

Abstract

Since 2008, when Fixing Global Finance was first published, collapse of housing and credit bubbles of 2000s has crippled world's economy. In this updated edition, Financial Times columnist Martin Wolf explains how global imbalances helped cause financial crises now ravaging U.S. economy and outlines steps for ending this destructive cycle-of which this is latest and biggest. An expanded conclusion recommends near- and long-term measures to stabilize and protect financial markets in future. Reviewing global financial crises since 1980, Wolf lays bare links between microeconomics of finance and macroeconomics of balance of payments, demonstrating how subprime lending crisis in United States fits into a pattern that includes economic shocks of 1997, 1998, and early 1999 in Latin America, Russia, and Asia. He explains why United States became borrower and spender of last resort, makes case that this was an untenable arrangement, and argues that global economic security depends on radical reforms in international monetary system and ability of emerging economies to borrow sustainably in domestic currencies. Sharply and clearly argued, Wolf's prescription for fixing global finance illustrates why he has been described as the world's preeminent financial journalist.

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