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Zombie Economics: How Dead Ideas Still Walk among Us Hardcover – October 3, 2010
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John Quiggin
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Print length248 pages
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LanguageEnglish
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PublisherPrinceton University Press
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Publication dateOctober 3, 2010
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Dimensions6.5 x 1 x 9.75 inches
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ISBN-100691145822
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ISBN-13978-0691145822
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Editorial Reviews
Review
"One of Bloomberg News's (bloomberg.com/news) Top Thirty Business Books of the Year for 2010"
"One of Financial Times (FT.com)'s Books of the Year in Nonfiction Round-Up in the Science & Environment list for 2010"
"One of Naked Capitalism blog's , "Must Read" Economics Books, Yves Smith for 2011"
"This book is certainly a good read for anyone eager to know why it is urgent that economists come up with a socially useful body of thought or suggestions." (Shanghai Daily)
"Entertaining and thought-provoking. . . . [W]orks as a good summary for non-specialists of how the economics debate has developed."---Philip Coggan, Economist
"Quiggin is a writer of great verve who marshals some powerful evidence." (Financial Times)
"Lucid, lively and loaded with hard data, passionate, provocative and . . . persuasive. . . . [Zombie Economics] should be required reading, even for those who aren't Keynesians or Krugmaniacs."---Glenn C. Altschuler, Barron's
"Apparently some economists have a sense of humor, dismal though it may be. Quiggin uses the 2008 global financial crisis as the focal point for examining five core macroeconomic and financial theories that have been--to use zombie terminology--killed by our current predicament. . . . Economics students and interested lay readers will find this valuable." (Library Journal)
"Erroneous economic ideas resemble the living dead, writes John Quiggin in his smart new book Zombie Economics. They are dangerous yet impossible to kill. Even after a financial crisis buries them, they survive in our minds and can rise unbidden from the necropolis of ideology."---James Pressley, Bloomberg News
From the Inside Flap
"Killing vampires and werewolves is easy enough. But how does one slay economic zombies--ideas that should have died long ago but still shamble forward? Armed with nothing but the truth, John Quiggin sets about dispatching these dead ideas once and for all in this engaging book. Zombie Economics should be required reading for those who would dare reanimate the economic theories that brought us to the edge of ruin."--Brad DeLong, University of California, Berkeley
"Tempted to tangle with your libertarian uncle or your Wall Street Journal bromide-spouting coworkers? If so, this book will arm you to rebut the clever phrasemaking and slippery reasoning that has allowed dead constructs like 'trickle down economics' to soldier onward. Quiggin's clear, elegant dissection of wrongheaded notions will appeal to both lay readers and academic economists."--Yves Smith, author ofECONned: How Unenlightened Self-Interest Undermined Democracy and Corrupted Capitalism
"Zombie Economics provides a unique and comprehensive discussion of the ideas that failed during the recent financial crisis. But the book contributes much more. Its discussion of how macroeconomics developed, and the ideology that has grown up around it, is every bit as important and interesting."--Mark Thoma, University of Oregon
"This is a terrific book. Quiggin is an engaging writer, and the combination of quotations, history, theory, and hard evidence makes the book quite a page-turner."--Andrew Leigh, Australian National University
From the Back Cover
"Killing vampires and werewolves is easy enough. But how does one slay economic zombies--ideas that should have died long ago but still shamble forward? Armed with nothing but the truth, John Quiggin sets about dispatching these dead ideas once and for all in this engaging book. Zombie Economics should be required reading for those who would dare reanimate the economic theories that brought us to the edge of ruin."--Brad DeLong, University of California, Berkeley
"Tempted to tangle with your libertarian uncle or your Wall Street Journal bromide-spouting coworkers? If so, this book will arm you to rebut the clever phrasemaking and slippery reasoning that has allowed dead constructs like 'trickle down economics' to soldier onward. Quiggin's clear, elegant dissection of wrongheaded notions will appeal to both lay readers and academic economists."--Yves Smith, author ofECONned: How Unenlightened Self-Interest Undermined Democracy and Corrupted Capitalism
"Zombie Economics provides a unique and comprehensive discussion of the ideas that failed during the recent financial crisis. But the book contributes much more. Its discussion of how macroeconomics developed, and the ideology that has grown up around it, is every bit as important and interesting."--Mark Thoma, University of Oregon
"This is a terrific book. Quiggin is an engaging writer, and the combination of quotations, history, theory, and hard evidence makes the book quite a page-turner."--Andrew Leigh, Australian National University
About the Author
Product details
- Publisher : Princeton University Press; Hardcover Edition (October 3, 2010)
- Language : English
- Hardcover : 248 pages
- ISBN-10 : 0691145822
- ISBN-13 : 978-0691145822
- Item Weight : 1.12 pounds
- Dimensions : 6.5 x 1 x 9.75 inches
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Best Sellers Rank:
#1,487,576 in Books (See Top 100 in Books)
- #2,289 in Theory of Economics
- #2,343 in Economic Policy
- #2,358 in Economic Policy & Development (Books)
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Top reviews from the United States
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Unfortunately, Quiggin does not take on the debate about free trade or globalization in this book, presumably because he does not consider the prevailing doctrine on free trade to be a “zombie” idea to be debunked. I know that this will be a disappointment to some of my liberal friends who have been swayed by the populist rhetoric on trade. On that subject I would recommend Paul Krugman, Peddling Prosperity: Economic Sense and Nonsense in the Age of Diminished Expectations (1994).
Zombie Economics: How Dead Ideas Still Walk Among Us is a critique of many of the free market ideas that have defined government policy in the last 30 years. The author John Quiggin a professor of economics at the University of Queensland is a well known Keynesian. The fact Professor Quiggin advocates a return to regulation of financial services and a returned to the mixed economy is not surprising. Taking this into account readers should not expect a balanced account of the pros and cons of the neo-liberal policies that replaced Keynesian policy that had existed since the end of the second world war. The book however, provides a thoughtful critique of some of the ideas that have been used to justify many of the polices carried out in the last 30 years.
The zombies Quiggin slay include, the great moderation, the efficient markets hypothesis, dynamic stochastic general equilibrium, trickle-down economics and privatisation. Despite my free market bias I found myself agreeing with his arguments against the folly that was the great moderation and absurdity that is the efficient markets hypothesis when applied to financial markets.
If history has proven anything, claims that the business cycle has been tamed tend to end in tears. Keynesians made similar claims which ended in the stagflation of the 1970s. Likewise, claims by the advocates of deregulation and the efficient markets hypothesis have ended in the great recession. What seems clear is that at present there exists no economic philosophy capable of taming the business cycle indefinitely.
I first encountered the efficient market hypothesis when studying accounting theory. The argument went, that players in the market have access to perfect information and the financial markets are in the best position to provide valuations of companies. This extended to notion that the marketplace had access to information not publicly available. This was used to justify why accounting standards were unnecessary and that there would a be a market for lemons. Clearly, the collapse of Enron in the mid 2000s and the incorrect valuation of financial assets prior to the 2008 recession should have killed this idea once and for all. Unfortunately, this flawed idea of financial markets being highly efficient is still being peddled to resist regulation of the financial system.
Equally, I found myself agreeing with Professor Quiggin on the trickle down effect, this idea has been used to justify massive tax cuts to the rich. Unlike, Quiggin I believe that reducing taxes on income (the benefit of a person's work) is desirable. He makes the point that at present income rate rates once loopholes in tax law are taken into account the tax system is actually regressive. I would argue that it is better to close the loopholes rather than return the top marginal tax rate to 70%-90%. On the broader point of the trickledown effect, many studies into this area have shown that tax cuts do not pay for themselves through increased growth. Many studies have shown that changes to the marginal rate of taxation has a little impact on the willingness of males to work (Who are usually the major income earner in a family). They do partly pay for themselves but ultimately the costs to a government budget exceed any benefits. Equally, there is little evidence that the poor actually benefit from the rich getting tax cuts. This probably suggests that tax cuts are probably better targeted at the bottom reducing the dis-incentive for people switching from welfare to work.
The greatest area of disagreement I had with this book was the chapter on privatisation. The book paints a picture of well run profitable government owned corporations being sold off at bargain basement prices and consumers losing out in the process. Quiggin does provide some interesting arguments against privatisation and makes a good case that government often leaves monopolies in place when privatising making it unlikely that efficiencies promised will be realised.
Overall I would recommend this book for anyone interested in economic policy. Even those of us who are friends of the free market have to accept that financial deregulation has contributed to the 2008 recession. I do worry that this book in the wrong hands will encourage ill-informed people to rally behind the idea of the mixed economy with out a serious consideration of its many downsides. A good counter to this book would be Milton Friedman's series and book Free To Choose which highlights the many problems of the mixed economy.
Could we have saved ourselves 30 years of screwball tax policy, and its rather disastrous consequences, had Dick Cheney, Don Rumsfeld, Jude Wanniski and Arthur Laffer not shared chicken salad on that fateful day in 1978? And what if the napkins had been linen instead of paper?
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