An Analysis of Charles P. Kindleberger's Manias, Panics, and Crashes: A History of Financial Crises (The Macat Library)

"Perhaps the most peculiar feature of a financial bubble - one that Charles Kindleberger's classic work Manias, Panics and Crashes draws particular attention to - is the inability of those trapped inside it to grasp the seriousness of their predicament. They know in principle that bubbles exist, and they know that the financial crashes that result from them are capable of destroying individuals' wealth and entire economies. Yet whenever and wherever a bubble begins to form, we're told that this time things are different, that there are sound reasons to continue to invest and to presume that prices will continue to rise steadily forever. Kindleberger's achievement is to use the critical thinking skill of evaluation to examine this strange mindset and the arguments advanced in support of it. He harshly judges the acceptability of the reasons used to create such arguments, and highlights the issues of relevance and adequacy that give us every reason to doubt them. Kindleberger also uses his powers of reasoning to effect an unusual achievement - writing a work soundly rooted in economics that nonetheless engages and convinces a non-specialist audience of the correctness of his arguments."--Provided by publisher When Manias, Panics, and Crashes was published (1978), the world was entering a new period of global economic turbulence. Economists based their analyses on the assumption that investors act rationally and often communicated their ideas with dry, technical language. Using a more literary, descriptive style, Kindleberger argued that markets are unstable precisely because investors act irrationally when they get swept along on a tide of optimism or despair making the financial markets susceptible to crises. Kindleberger shows a distinct pattern in worldwide financial crashes and concludes that the world needs a single, central body to stabilize global markets at their most fragile moments. Ways in to the text Who was Charles P. Kindleberger? What does Manias, Panics and Crashes say? Why does Manias, Panics and Crashes matter? Section 1: Influences Module 1: The Author and the Historical Context Module 2: Academic Context Module 3: The Problem Module 4: The Author's Contribution Section 2: Ideas Module 5: Main Ideas Module 6: Secondary Ideas Module 7: Achievement Module 8: Place in the Author's Work Section 3: Impact Module 9: The First Responses Module 10: The Evolving Debate Module 11: Impact and Influence Today Module 12: Where Next? Glossary of Terms People Mentioned in the Text Works Cited In this magisterial account of the Great Depression, MIT economist Charles Kindleberger emphasizes three factors that continue to shape global financial markets: panic, the power of contagion, and importance of hegemony. Reissued on its fortieth anniversary with a new foreword by Barry J. Eichengreen and J. Bradford DeLong, this masterpiece of economic history shows why U.S. Treasury Secretary Lawrence Summers, during the darkest hours of the 2008 global financial crisis, turned to Kindleberger and his peers for guidance Emphasizes three factors that continue to shape global financial markets: panic, the power of contagion, and importance of hegemony. This title shows why US Treasury Secretary Lawrence Summers, during the darkest hours of the 2008 global financial crisis, turned to Kindleberger and his peers for guidance.