- Hardcover: 272 pages
- Publisher: Oxford University Press; 1 edition (May 17, 2001)
- Language: English
- ISBN-10: 0195143302
- ISBN-13: 978-0195143300
- Product Dimensions: 9.1 x 1 x 6 inches
- Shipping Weight: 1.2 pounds (View shipping rates and policies)
- Average Customer Review: 18 customer reviews
- Amazon Best Sellers Rank: #485,308 in Books (See Top 100 in Books)
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The Volatility Machine: Emerging Economics and the Threat of Financial Collapse 1st Edition
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"A welcome departure from the sterile academic debate on the subject of financial crises." -- Institutional Investor, June 2001
From the Back Cover
"Michael Pettis brilliantly demystifies the complexities of global finance, banking and capital markets crisis. Volatility in markets may never be our friend, but how to live with it and manage the uncertainty and risks to global economic security requires a careful reading of this pathbreaking book."
- Glenn Yago, Director, Milken Institute
"The Volatility Machine makes refreshing use of the role of corporate finance theory in examining a country's capital structure and assessing its financial vulnerability."
- Rger Ibbotson, Professor in the Practice of Finance, Yale University, and Chairman, Ibbotson Associates, Inc.
"This valuable book leads us away from the stale debate on the international financial architecture with a simple and powerful message: proper management of a country's external balance sheet is the key to avoiding financial distress. This is a book that belongs on the bedside table of every financial minister."
- Dani Rodrik, Professor of International Political Economy, John F. Kennedy School of Government, Harvard University
"Finally, here is a readable book that explores thoroughly the proposition that EM sovereigns default on their external debt, not because they are dissolute, but as often as not because they are vulnerable to adverse shocks emitted by the rich countries. Michael Pettis's pathbreaking ideas should undoubtedly attract the attention of finance and treasury ministers and their economic advisors as well as all students of development economics."
- Michael Adler, Professor of International Finance Graduate School of Business, Columbia University
Top customer reviews
The second half may be hard going for casual readers without a background in corporate finance.
Pettis also has a blog you can check out. His analysis is completely informed by his expereince and world travels. He currently resides in China and gives insightful perspective on how the global finacial systems run and why there can be systemic risk. Excellent book.
But well worth the read for insightful and sensible aproach to assessing sovereign risk, some real gems in here for investors.
Crisis invariably occurs as easy liquidity stops in developed countries and money flows out of emerging markets.
The ones which create natural hedges and think long term fare better in times of stress.
The volatility machine goes into great detail about financial crisis of multiple periods. Unlike other authors who skate through the details, only looking at a few of their favorite crises, Petis incorporates work as far back as financial data has existed. As a result, his conclusions are more fleshed out than many of the more recent books that have been written on the topic. He also - unlike so many other economic writers - has solid financial experience; a big plus for practitioners. His ideas of volatility and it's relationship to liquidity and financial crisis are really unique in a nuanced way. They are practical and theoretical all at once.
This should be read by anyone who is interested in financial crisis or happens to work in any area of financial products that are impacted by liquidity (basically every financial product). It clearly links macroeconomics, volatility, and financial asset pricing/risk together.
If I could give it 6 stars if I would.
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