No comments about Money Through the Ages: Money Power (Cooper, Jason, Money.).

No comments about New Research in Financial Markets.

No comments about Gold: The Yellow Devil.

1 comments about Money (Series B (Norvik Press), No. 27.).

1. Thanks to Norvik Press for making this novel (among others) available in English. Benedictsson's tale of an innocent girl manipulated into a marriage she's neither ready nor suited for is a page-turner. Selma Berg is not your stereotypical 19th century heroine - she's neither a victim, a doormat, nor a "gentle parasite," to borrow a phrase from Thackeray. She's not a paragon of virtue, either - like all the characters in the book, Selma has her share of flaws, but ultimately she's a protagonist you can like and even admire. A feminist writer who ranks with Karin Michaelis and Amalie Skram, Victoria Benedictsson deserves a wider readership.

No comments about Exchange Rate Economics: Where Do We Stand? (CESifo Seminar Series).

No comments about A New History of the Royal Mint.

1 comments about DEMAND AND SUPPLY OF PUBLIC GOODS (Collected Works of James M Buchanan).

1. James M. Buchanan's The Demand and Supply of Public Goods develops a theory of public goods in response to the more traditional public-goods theory developed during the 1950s by Paul Samuelson in his famous articles in the Review of Economics and Statistics and by Richard A. Musgrave in The Theory of Public Finance. The traditional approach argues that the provision of public goods is justified as a response to market failures. Buchanan argues that just because markets may sometimes fail, it does not automatically follow that government will therefore do a better job. The process of politics is not perfect--group decisions cannot meet individual preferences as closely as can individual decisions. Furthermore, government action is costly (e.g. excess burden associated with taxation, disincentive effects). This is not to say that there should be no government intervention, but government is not the panacea that the political left makes it out to be, and we should be cognizant of its imperfections when deciding how much economic activity to organize through government rather than markets. Whereas the traditional approach focuses on market failure, Buchanan focuses on political failure, arguing that government action should be evaluated by the same criteria by which markets are deemed to have failed. In short, market failure may be a necessary condition for government action, but not a sufficient one.
   
   The Samuelson-Musgrave approach results in a "social welfare function" (p. 128), which is equivalent to the perspective of an outsider looking in to determine what is good for society, i.e. what choices it should make in allocating its resources. This approach may seem somewhat pontificatory in nature, but this is how public finance sees its traditional function: advising governments.
   
   Buchanan, in contrast, develops what he calls a "voluntary exchange" (p. 8) theory of public goods. It is based on the notion that insiders in society, i.e. citizens who participate in their role as taxpayers and as beneficiaries of public services, should be the ones to decide what choices are best for them when it comes to determining which and how many goods should be publicly provided, and how to tax themselves to pay for these goods. One advantage to Buchanan's approach is that the social welfare function inherently contains a normative component that is exogeneously determined (assumed, really), and which Buchanan's model does not require, making his a methodologically purer theory.
   
   Another difference lies in the Samuelson-Musgrave definition of public goods as those that are nonexcludable and nonrivalrous: once provided, no one can be excluded from the provision of a public good, and its provision to additional taxpayer-citizens does not add to its cost. The implicit rationale is that such goods have attributes that make their provision more efficient as a public good than as a private good. In practice, however, only very few goods follow this definition perfectly. Buchanan argues instead that what matters is not so much the physical attributes of a good but how its provision is organized, i.e. whether through market organization or political organization. Thus, Buchanan's model applies to any good of which the provision is to some extent collectively organized.
   
   The book's core methodology is a standard two-person, two-good microeconomic demand-supply model, except that one of the goods is a private good and the other is a public good. With each chapter, the initial assumptions are dropped, and the conclusions are shown to remain intact. As this description may make clear, the book has very much a microeconomics textbook feel to it (it was originally based on second-year graduate seminar lectures Buchanan gave during the 1950s). If you're a graduate student writing a thesis on public-goods theory, you'll definitely want to include this book among your research (along with the papers in volume 15 of Buchanan's Collected Works series, Externalities and Public Expenditure Theory). If you're a general-interest reader, the book may be somewhat on the abstract side, although if you've ever taken microeconomics 101 somewhere, the economics is by no means difficult to follow.

4 comments about A History of Interest Rates.

1. Financial assets grow in value with the passage of time. For debt, we call this "interest", and for equity, we call it "yield". Homer's book is the superbly recorded history of this phenomenon. Perhaps its greatest value is that when you hear or read a new theory, you can assess its validity by comparing the theory's implications with the historical evidence.



2. This exceptionally written, highly readable volume, written by a true pioneer in bond trading and fixed income research, covers interest rate trends and lending practices spanning over four millennia of economic history. Despite the paucity of data prior to the Industrial Revolution, the book manages to present a highly detailed analysis of money markets and borrowing practices in major economies. A History of Interest Rates seeks to provide a helicopter perspective of interest rate movements, avoiding anecdotal indications if possible and applying analytical tools such as yield curves and decennial averaging of the available data.

   Homer asserts that "the free market long-term rates of interest for any industrial nation, properly charted, provide a sort of fever chart of the economic and political health of that nation." Given the unprecedented rise in asset price volatility and the emergence of extraordinary inflation rates during twentieth-century episodes of economic distress--occurrences which were nearly imponderable during the nineteenth century--it would seem that we are now living in times of eschatological excess, which is actually one of the understated themes in this book's third edition.

   This book should be part of the library of every investment analyst, together with such finance classics as Graham and Dodd's Security Analysis and Lefevre's Reminiscences of a Stock Operator.




3. Sidney Homer delivers what he promised - a lengthy and extremely detailed history of interest rates. Almost completely absent is any commentary on why interest rates have changed through history. Any observations of cause and effect are left up to the reader to discern. But as a pure history text, the book is readable and thorough both in breadth and depth.



4. Many might say that a book of this subject matter would be incredibly dry and boring. But if one reads it from cover to cover, as was the case for this reviewer, one will find it to be packed with fascinating information and insights on almost three thousand years of financial history. Nearly every culture and geography is represented as the authors take the reader on a roller coaster ride over the hills and valleys of lending policies and usury in both private and public contexts. There are many surprises for the reader who is unaware of the great impact that interest rates can have on human activities, including war and pestilence, but also human discovery and adventure. For the serious researcher, there are also a multitude of tables and graphs, illustrating the behavior of interest rate time series for different cultures and governments throughout history.
   
   The scale of importance of interest rates in the modern world is staggering if compared with the historical periods that are discussed in this book. Indeed, and this is brought out by the authors, interest rates in their words are "watched like a hawk", and millions of dollars are spent every year in interest rate modeling and analysis of fixed income securities such as bonds and mortgage-backed financial instruments. All investors, no matter which sector of the market they are involved in, have to monitor very closely the trends in interest rates.
   
   The magnitude of interest rates can enable wars to be fought and lost, as is brought out brilliantly in this book. Legal philosophies and developments have also guided humans as to what is considered just compensation for lending, with rates in some cultures considered to be astronomical as compared to others. And the authors show that there have been periods where lending has barely occurred at all, with progress in such periods taking as expected a back seat. One cannot grow and flourish without taking risk, and lending risk is measured with the level of interest rates and their volatilities.
   
   Many might say that economic and financial history cannot be romanticized. After all, economics is supposed to be the "dismal science". The authors do not intend to present such a romantic view, but they do so inadvertently perhaps. With all the conflicts that have been waged because of financial competition, with most of these conflicts being horrifying and in some cases completely destructive to the societies that waged them, lending encapsulates the need for humans to plan for the future. It exemplifies the attitude that the future holds promise, and solidifies a level of trust between borrower and lender. It allows both parties to assess their current position with what it will be in the future. And of course it is an axiom that it is always infinitely preferable to exchange coins rather than bullets.

No comments about Transatlantic Perspectives on Euro.

No comments about America's Declaration of Financial Independence.