The End of Theory: Financial Crises, the Failure of Economics, and the Sweep of Human Interaction
(eBook)

Grouping Information

Hoopla Extract Information

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    [year] => 2017
    [artist] => Richard Bookstaber
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    [coverImageUrl] => https://cover.hoopladigital.com/pup_9781400884964_270.jpeg
    [titleId] => 13283418
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    [language] => ENGLISH
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    [title] => The End of Theory
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    [pages] => 240
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    [synopsis] => "Selected for Askblog's Books of the year 2017" Richard Bookstaber has overseen risk management at investment banks Morgan Stanley and Salomon Brothers, as well as major hedge funds such as Moore Capital and Bridgewater. He has also held positions at the U.S. Treasury, and is currently at the University of California. He is the author most recently of A Demon of Our Own Design (Wiley). 
	An in-depth look at how to account for the human complexities at the heart of today's financial system

Our economy may have recovered from the Great Recession-but not our economics. In The End of Theory, Richard Bookstaber discusses why the human condition and the radical uncertainty of our world renders the standard economic model-and the theory behind it-useless for dealing with financial crises. What model should replace it? None. At least not any version we've been using for the past two hundred years. Instead, Bookstaber argues for a new approach called agent-based economics, one that takes as a starting point the fact that we are humans, not the optimizing automatons that standard economics assumes we are.

Bookstaber's groundbreaking paradigm promises to do a far better job at preventing crises and managing those that break out. As he explains, our varied memories and imaginations color our economic behavior in unexpected hues. Agent-based modeling embraces these nuances by avoiding the mechanistic, unrealistic structure of our current economic approach. Bookstaber tackles issues such as radical uncertainty, when circumstances take place beyond our anticipation, and emergence, when innocent, everyday interactions combine to create sudden chaos. Starting with the realization that future crises cannot be predicted by the past, he proposes an approach that recognizes the human narrative while addressing market realities.

Sweeping aside the historic failure of twentieth-century economics, The End of Theory offers a novel and innovative perspective, along with a more realistic and human framework, to help prevent today's financial system from blowing up again. "Important and elegantly written."---Jason Zweig, Wall Street Journal "The End of Theory holds some important lessons for financial markets today. . . . According to Bookstaber, it's time to stop tweaking a 150-year-old model that seems to be getting worse, not better, at predicting crises, and embrace something totally new. Finally, and perhaps most usefully, he challenges the economics profession itself, where too many experts still have way too much faith in their own mathematical infallibility."---Rana Faroohar, Financial Times "
	[A]nyone who wants to understand the workings of

the financial system will benefit from reading this book. . . . The analysis is top-notch." "This book sets out to be a breezy but erudite, addition to the list of volumes on what is wrong with economics and how to fix it."---Peter Morris, Financial World "Bookstaber himself is a practitioner of agent-based modeling as applied to financial markets, and his description of this approach in the latter part of his book is its most interesting section."---Diane Coyle, Project Syndicate "What makes The End of Theory unusual among critiques of the genre is that Bookstaber makes a case for an interesting alternative approach, called agent-based modeling (ABM)." "Bookstaber has done a great job of exposing the flaws in dominant economic theories. For anyone concerned with these issues, [The End of Theory] is well worth reading." "Bookstaber slams the economic models. . . . Bookstaber, who spent his career on Wall Street, argues these should be replaced by 'agent-based' models that incorporate the herd behaviour readily observed in financial crises across all countries through time."---Adam Creighton, The Australian "[The End of Theory] is a suggestive, if not convincing, representation of agent-based modeling possibilities." "Richard Bookstaber is well placed to discuss the topic. . . . The End of
    [url] => https://www.hoopladigital.com/title/13283418
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    [subtitle] => Financial Crises, the Failure of Economics, and the Sweep of Human Interaction
    [publisher] => Princeton University Press
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