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walkitoutFinally, a review!
I got this from my library system (not ILL -- internal request through the Minuteman network; the book itself belongs to Newton Free Library, which seems like the library that has _all_ the books I request, which probably means something) and I may yet buy the thing. It is in print and reasonably priced (around $30 on Amazon, B&N online, etc.) but not available as an e-book through Amazon. It was written and published before the bust and the period it covers ends around 2000 or so.
The author has been an economist for Quite Some Time now and admits to having changed his mind about a few things, and he's spent a bunch of time at various components of the Fed, so there's a lot of reason to believe he knows what he's talking about.
It's a slow read, because there is a lot to think about. I think the more familiar you are with the time/place covered (let's call it 18th century and onward), the more sense you'll be able to make of the book itself -- it assumes you already know about the wars that presented such stresses to the financial systems of the participants, for example. I have zero formal training in economics, and thus don't know the names of a lot of really basic ideas (the Phillips Curve, for example -- I mean, I know that term _now_), however I have decent rough understanding of the domain and various schools of thought within it, so a lot of my slowness involves matching the unfamiliar terminology to the familiar idea. If you don't recognize the underlying ideas, you're going to be in a lot of trouble here.
That said, it's a great book and a really interesting one. Wood _has_ opinions but he's (mostly) not embedding them in the frame, which is very refreshing. I think he has had a great deal of experience navigating discussions with people who maintain long-standing different perspectives and that enables him to structure the exposition as objectively as I could imagine.
If you've played any of the online games I've pointed to (or just read my reviews of them), you know the basics: money supply, price level, unemployment, interest rate/cost of money, and perhaps even pertinent regulatory targets like reserve requirements. Whether you are Jane Doe or Banker Jane Roe or Businesswoman Zoe, you care about all these things even when you cannot name them, because you have to figure out how you're going to make it through the day/week/month/year and pay for the stuff you need. Your life is more difficult if you cannot predict what you are going to be paid tomorrow/next week/next month/next year, or what you will have to pay to buy food, ditto, or you don't know the value of what someone owes you will be etc. Inflation can make life easier for debtors, if they have incomes which ratchet up more or less with the price level (inflation makes your debt go away!). Deflation can make life great if people owe you money and you're sitting on a liquid pile of the stuff. Prices which don't change (very much) don't necessarily directly benefit one group or the other -- except by making those predictions so much easier to make.
Central bankers exist at the nexus of domestic (in-group) price stability and foreign (out-group) markets (exchange rates). They _try_ to keep these things from moving around too much, but as Wood does a fantastic job of displaying over and over and over again, this isn't very easy, and as soon as you add additional goals (like, say, full employment or financing a war) it becomes hair-raising. Worse, other places' price problems get transmitted to you via the exchange -- and vice versa.
Central bankers have a variety of tools to try to keep all this sloshing around from turning into a destructive flood (or drought). All of those tools have limitations. And Wood ably depicts the use of those tools and the limitations of those tools, and how changes in the global rules of the game have strengthened or weakened various strategies -- and how history gives us clues as to what to expect, but the gap in time means we _forget_ and repeat our mistakes. Particularly in the 20th century discussion, he incorporates a nuanced understanding of the intersection of politics, economics and central banking.
If you've ever sat around and wondered how we ever got in the habit of giving our money to someone else to hold onto and then writing checks against it, Wood has the story right here. If you've ever wondered about just what it is the FOMC does, Wood has (some of) the story here as well (he assumes a lot of knowledge). If you've ever wondered why the government has a monopoly on creating money (and prosecutes people who introduce competitive money), you'll have a much more solid understanding after reading this book. It's not that that's what the book is about -- it's that all of those things are around the edges of central banking.
I even think this book constitutes a solid grounding for understanding why the Euro exists, even tho people across the political spectrum in the United States think it's an incredibly stupid thing. If you're up for 400 pages (really: this book isn't a third end notes. There are some footnotes, but it's basically 400 pages of exposition) about monetary, fiscal and etc. policy, I doubt you could do better (altho I know what I'm going to read next on this topic, because I found something with a very favorable review by the author of this book).
I got this from my library system (not ILL -- internal request through the Minuteman network; the book itself belongs to Newton Free Library, which seems like the library that has _all_ the books I request, which probably means something) and I may yet buy the thing. It is in print and reasonably priced (around $30 on Amazon, B&N online, etc.) but not available as an e-book through Amazon. It was written and published before the bust and the period it covers ends around 2000 or so.
The author has been an economist for Quite Some Time now and admits to having changed his mind about a few things, and he's spent a bunch of time at various components of the Fed, so there's a lot of reason to believe he knows what he's talking about.
It's a slow read, because there is a lot to think about. I think the more familiar you are with the time/place covered (let's call it 18th century and onward), the more sense you'll be able to make of the book itself -- it assumes you already know about the wars that presented such stresses to the financial systems of the participants, for example. I have zero formal training in economics, and thus don't know the names of a lot of really basic ideas (the Phillips Curve, for example -- I mean, I know that term _now_), however I have decent rough understanding of the domain and various schools of thought within it, so a lot of my slowness involves matching the unfamiliar terminology to the familiar idea. If you don't recognize the underlying ideas, you're going to be in a lot of trouble here.
That said, it's a great book and a really interesting one. Wood _has_ opinions but he's (mostly) not embedding them in the frame, which is very refreshing. I think he has had a great deal of experience navigating discussions with people who maintain long-standing different perspectives and that enables him to structure the exposition as objectively as I could imagine.
If you've played any of the online games I've pointed to (or just read my reviews of them), you know the basics: money supply, price level, unemployment, interest rate/cost of money, and perhaps even pertinent regulatory targets like reserve requirements. Whether you are Jane Doe or Banker Jane Roe or Businesswoman Zoe, you care about all these things even when you cannot name them, because you have to figure out how you're going to make it through the day/week/month/year and pay for the stuff you need. Your life is more difficult if you cannot predict what you are going to be paid tomorrow/next week/next month/next year, or what you will have to pay to buy food, ditto, or you don't know the value of what someone owes you will be etc. Inflation can make life easier for debtors, if they have incomes which ratchet up more or less with the price level (inflation makes your debt go away!). Deflation can make life great if people owe you money and you're sitting on a liquid pile of the stuff. Prices which don't change (very much) don't necessarily directly benefit one group or the other -- except by making those predictions so much easier to make.
Central bankers exist at the nexus of domestic (in-group) price stability and foreign (out-group) markets (exchange rates). They _try_ to keep these things from moving around too much, but as Wood does a fantastic job of displaying over and over and over again, this isn't very easy, and as soon as you add additional goals (like, say, full employment or financing a war) it becomes hair-raising. Worse, other places' price problems get transmitted to you via the exchange -- and vice versa.
Central bankers have a variety of tools to try to keep all this sloshing around from turning into a destructive flood (or drought). All of those tools have limitations. And Wood ably depicts the use of those tools and the limitations of those tools, and how changes in the global rules of the game have strengthened or weakened various strategies -- and how history gives us clues as to what to expect, but the gap in time means we _forget_ and repeat our mistakes. Particularly in the 20th century discussion, he incorporates a nuanced understanding of the intersection of politics, economics and central banking.
If you've ever sat around and wondered how we ever got in the habit of giving our money to someone else to hold onto and then writing checks against it, Wood has the story right here. If you've ever wondered about just what it is the FOMC does, Wood has (some of) the story here as well (he assumes a lot of knowledge). If you've ever wondered why the government has a monopoly on creating money (and prosecutes people who introduce competitive money), you'll have a much more solid understanding after reading this book. It's not that that's what the book is about -- it's that all of those things are around the edges of central banking.
I even think this book constitutes a solid grounding for understanding why the Euro exists, even tho people across the political spectrum in the United States think it's an incredibly stupid thing. If you're up for 400 pages (really: this book isn't a third end notes. There are some footnotes, but it's basically 400 pages of exposition) about monetary, fiscal and etc. policy, I doubt you could do better (altho I know what I'm going to read next on this topic, because I found something with a very favorable review by the author of this book).