New Books in Finance

Culture matters. And a key element of culture is storytelling. These maxims can be accepted as given, except in modern economics, where the mechanistic framework of modern macroeconomic analysis allows just for formulas. Concerned about the relationship between unemployment levels and inflation? Here's the formula:  gW = gWT - f(U − U*) + λ·gPex    It's called the Phillips Curve. Your personal experience of unemployment or rising costs, the stories that you tell others or hear from them--about globalization, about jobs being exported, about "disintermediation" through technology, etc--these stories play no role in the economics taught in the classroom, but may have a significant impact on the decisions that you make and the life you may lead.Robert Shiller's new book, Narrative Economics: How Stories Go Viral and Drive Major Economic Events (Princeton, 2019) reminds economists and participants in the economy--that's all of us--of the importance of storytelling in explaining economic developments and explaining how people respond to events. Using the language and methodology of epidemiology, Shiller shows how various economic narratives have "gone viral" and had real economic impacts.   Narrative Economics builds on the advances of behavioral economics in recent decades by adding the core element of social activity--storytelling--to our understanding of economic change.Daniel Peris is Senior Vice President at Federated Investors in Pittsburgh. Trained as a historian of modern Russia, he is the author most recently of Getting Back to Business: Why Modern Portfolio Theory Fails Investors. You can follow him on Twitter @Back2BizBook or at http://www.strategicdividendinvestor.com Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

“Free enterprise” is an everyday phrase that connotes an American common sense. It appears everywhere from political speeches to pop culture. And it is so central to the idea of the United States that some even labeled Christopher Columbus and the Pilgrims free enterprisers. In his new book, Free Enterprise: An American History (Yale University Press, 2019), Lawrence Glickman analyses that phrase’s historical meaning and shows how it became common sense.Glickman, a historian and the Stephen and Evalyn Milman Professor in American Studies at Cornell University, traces the phrase from its many 19th-century meanings, of which abolitionists wielded a dominant one (consider the word free), to its conservative reformulation in the 1920s and 30s. He shows how “free enterprise” became the rallying cry of the business community from the 1930s to the Powell Memo in the early 70s. This book is a whirlwind tour of a keyword that has had immense rhetorical power in modern American history and that scholars have yet to critically examine. Glickman’s book provides a compelling example of how historians can study the historical construction of common sense and is a welcome contribution to intellectual history, political history, and the history of capitalism.Dexter Fergie is a PhD student of US and global history at Northwestern University. He is currently researching the 20th-century geopolitical history of information and communications networks. He can be reached by email at dexter.fergie@u.northwestern.edu or on Twitter @DexterFergie. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

I spoke with James C. W. Ahiakpor, he is Professor Emeritus, Department of Economics, at California State University, East Bay, USA. We discussed his new book Macroeconomics without the Errors of Keynes: The Quantity Theory of Money, Saving, and Policy (Routledge, 2019) A provocative title for a very original book that is a critique not only of Keynes but also of some of his followers and his scholarly opponents. This is a sophisticated book and an erudite account and analysis of crucial debates in economics over the past 100 years.I asked what is the origin of the book and why he wrote a book 'against' J.M. Keynes. I also asked to locate Keynes and his relationship with classical economists. We then discussed why macroeconomics needs to be restored to its classical roots and what are the distortions that he attributes to Keynes. Finally we spoke about the implications of his book for contemporary economic and monetary policy debates after the great recession.Professor Ahiakpor argues that modern macroeconomics is in a stalemate, with seven schools of thought attempting to explain the workings of a monetary economy and to derive policies that promote economic growth with price-level stability. He attributes some of those problems to the errors of Keynes and to the reception of his work.The crucial errors made by Keynes are due to his reading of classical macroeconomics, in particular the classical Quantity Theory and the meaning of saving.In light of this, we discussed with James Ahiakpor how to solve those misunderstandings to achieve economic policies consistent with the promotion of the employment and economic growth that Keynes was seeking.This is an advanced book written for scholars of macroeconomics and history of economic thought and of course everybody interested in Keynes, the complexity of his work and possibly some oversights if you will agree with professor Ahiakpor.Andrea Bernardi is Senior Lecturer in Employment and Organization Studies at Oxford Brookes University in the UK. He holds a doctorate in Organization Theory from the University of Milan, Bicocca. He has held teaching and research positions in Italy, China and the UK. Among his research interests are the use of history in management studies, the co-operative sector, and Chinese co-operatives. His latest project is looking at health care in rural China. He is the co-convener of the EAEPE’s permanent track on Critical Management Studies. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

Dividend investors are a small but dedicated band. Ten years into a stock market rally led by no or low-dividend paying companies, they still argue in favor of long-term business ownership rather than betting on near-term prices in the market. They still view a dividend as, in the words of Richard Russell, "a true return on investment. Everything else is hope and speculation." David Bahnsen is just such an investor. As CIO of the Bahnsen Group, he and his team manage $2 billion in assets. His new book, The Case for Dividend Growth: Investing in a Post-Crisis World (Post Hill Press, 2019) is a concise, powerful and up-to-date statement in favor or bringing a tangible cashflow sensibility to stock market investing. I am strongly biased in favor of his approach.  But even if you are not, The Case for Dividend Growth offers the valuable perspective on investing of a Registered Investment Advisor.  That is, everyday he has to deal with flesh and blood investors, not just utility maximizing Chicago robots. Bahnsen doesn't offer any hot stock tips, but NBN listeners will still benefit from listening to his passionately held views about how to navigate the uncertainty of the stock market.Daniel Peris is Senior Vice President at Federated Investors in Pittsburgh. Trained as a historian of modern Russia, he is the author most recently of Getting Back to Business: Why Modern Portfolio Theory Fails Investors. You can follow him on Twitter @Back2BizBook or at http://www.strategicdividendinvestor.com Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

The authors of Chains of Finance: How Investment Management is Shaped (Oxford University Press, 2017) make points that professionals already know and that end-investors ought to know: that there are a lot of cooks in the investment kitchen, and that the investment process is materially shaped by the chain of individuals and institutions that go into manufacturing investment products. Advisors, consultants, compliance, sales, portfolio managers, analysts, traders, distributors, custodians---these job titles are just part of that machinery. And they all interact with one another in a variety of ways. Most people operating in a complex industry understand that there is a lot going on behind the scenes that affects the ultimate outcome of the manufacturing process or service generation. Investment management is the same. Chains of Finance is part of a growing literature in the social studies of finance that highlights that investment is an interactive social process, not a cut and dried application of some algorithm, even when it is promoted as a computer-driven, machine only exercise. Please listen to my interview with one of the authors, Philip Grant, here....Daniel Peris is Senior Vice President at Federated Investors in Pittsburgh. Trained as a historian of modern Russia, he is the author most recently of Getting Back to Business: Why Modern Portfolio Theory Fails Investors. You can follow him on Twitter @Back2BizBook or at http://www.strategicdividendinvestor.com Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

Federal housing finance policy and mortgage-backed securities have gained widespread attention in recent years because of the 2008 financial crisis, but government credit has been part of American life since the nation’s founding. Sarah L. Quinn’s new book dissects the political and social development of these policies in American Bonds: How Credit Markets Shaped a Nation (Princeton University Press, 2019). Quinn is associate professor of sociology at the University of Washington.From the 1780s, when national land credit policy was established, to the postwar foundations of our current housing finance system, Quinn examines the evolution of securitization and federal credit programs. American Bonds shows that since the Westward expansion, the U.S. government has used financial markets to manage America’s complex social divides, and politicians and officials across the political spectrum have turned to land sales, home ownership, and credit to provide economic opportunity without the appearance of market intervention or direct wealth redistribution. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

How are markets made? In Automating Finance: Infrastructures, Engineers, and the Making of Electronic Markets (Cambridge University Press, 2019), Juan Pablo Pardo-Guerra, an assistant professor in sociology at the University of California, San Diego, explores the history of the finance industry to understand the role of markets and technologies in contemporary capitalism. The book offers a detailed theoretical engagement with the personalities and technological changes underpinning the modern system of automated finance. It uses the case study of the development of the London Stock Exchange, looking at the social relations embedded in financial markets, before moving to look at the global, American system. Charting the move from trading floors to trading screens, the book considers individuals and broader social systems shaping enabling and constraining behaviour in the world of finance. Overall the book offers a rethinking of the meaning of markets, and is essential reading across social science, history, and management studies. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

Small is beautiful, right? Isn't that what we've all been taught? From Jeffersonian politics to the hallowed family farm, from craft breweries to tech start ups in the garage. Small business is the engine and the soul and the driver of the American system. That's the dominant narrative. And according to Robert Atkinson and Michael Lind, it is really wrong. In their new book, Big is Beautiful: Debunking the Myth of Small Business (MIT Press, 2018), the authors review the empirical evidence and conclude that large businesses create more, generate more intellectual capital, pay better, pollute less, are more diverse, and score higher on pretty much any measure of economic or employee well-being that you can come up with. It is a shocking conclusion, but one that everyone involved in the regulation of business should be aware of. (And, by the way and probably a surprise to many, small business has had its thumb on the regulatory scales for much of the republic's history.) Big is Beautiful goes against--way against--the prevailing narrative about business in this country.Daniel Peris is Senior Vice President at Federated Investors in Pittsburgh. Trained as a historian of modern Russia, he is the author most recently of Getting Back to Business: Why Modern Portfolio Theory Fails Investors. You can follow him on Twitter @Back2BizBook or at http://www.strategicdividendinvestor.com Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

The machines have taken over.... For many operating in investment management, it can certainly seem that way: factor investing, algorithmic investing, dynamic hedging instruments, risk management derivatives driven by changes in market prices, etc. dominate much of the investment narrative. And now and again these supposedly superior investment approaches get blamed for causing big blow ups. If portfolio insurance led to a wave of computer selling in 1987, then the chaos generated by the models in 2008-2009 was incomparably larger. So say the critics. But in Financial Models and Society: Villains or Scapegoats (Elgar, 2018), Ekaterina Svetlova begs to differ. She looks at how quantitative models are actually used by investors and finds a whole space where human judgment, intuition and non-model based factors come into play as to when and how and to what degree financial models are actually implemented. This social social of finance is well known in academia; it needs to be better known among practitioners. Listen to her interview here.Daniel Peris is Senior Vice President at Federated Investors in Pittsburgh. Trained as a historian of modern Russia, he is the author most recently of Getting Back to Business: Why Modern Portfolio Theory Fails Investors. You can follow him on Twitter @Back2BizBook or at http://www.strategicdividendinvestor.com Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

What can we learn from the financial crisis that brought Hitler to power? How did diplomatic deadlock fuel the rise of authoritarianism? Tobias Straumann shares vital insights with 1931: Debt, Crisis, and the Rise of Hitler (Oxford University Press, 2019). Through his fast-paced narrative, Straumann reveals how inflexible treaties created an inescapable debt trap that spawned Nazism. Caught between investor confidence and domestic political pressure, unrealistic agreements left decision makers little room for maneuver when crisis struck. 1931 reminds us of hard lessons relevant to designing resilient agreements today.Tobias Straumann is a Senior Lecturer at the University of Zurich and teaches economic history both to historians and economists. His research interests span numerous contributions to contemporary European business, monetary, and financial history. 1931 is his fourth book.Ryan Stackhouse is a historian of Europe specializing in modern Germany and political policing under dictatorship. His book exploring Gestapo enforcement practices toward different social groups is nearing completion under the working title A Discriminating Terror. He also cohosts the Third Reich History Podcast and can be reached at john.ryan.stackhouse@gmail.com or @Staxomatix. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance