The Origin of Financial Crises

By George Cooper

Categories: Business & Money

In The Origin of Financial Crises (2008), fund manager George Cooper argues that financial markets are inherently unstable and prone to cycles of boom and bust. Cooper challenges the efficient market hypothesis, which holds that markets settle at stable prices, drawing instead on the ideas of Hyman Minsky. He argues that credit-fuelled booms naturally build up instability, and that central banks should manage credit actively rather than react only when asset bubbles burst.

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• Fareed Zakaria: “It’s probably the single best brief account of how we got into this economic mess. ... I think you’ll learn a lot from it. I know I did.”