The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It (Google eBook)

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Princeton University Press, Aug 4, 2008 - Business & Economics - 208 pages
23 Reviews

The subprime mortgage crisis has already wreaked havoc on the lives of millions of people and now it threatens to derail the U.S. economy and economies around the world. In this trenchant book, best-selling economist Robert Shiller reveals the origins of this crisis and puts forward bold measures to solve it. He calls for an aggressive response--a restructuring of the institutional foundations of the financial system that will not only allow people once again to buy and sell homes with confidence, but will create the conditions for greater prosperity in America and throughout the deeply interconnected world economy.

Shiller blames the subprime crisis on the irrational exuberance that drove the economy's two most recent bubbles--in stocks in the 1990s and in housing between 2000 and 2007. He shows how these bubbles led to the dangerous overextension of credit now resulting in foreclosures, bankruptcies, and write-offs, as well as a global credit crunch. To restore confidence in the markets, Shiller argues, bailouts are needed in the short run. But he insists that these bailouts must be targeted at low-income victims of subprime deals. In the longer term, the subprime solution will require leaders to revamp the financial framework by deploying an ambitious package of initiatives to inhibit the formation of bubbles and limit risks, including better financial information; simplified legal contracts and regulations; expanded markets for managing risks; home equity insurance policies; income-linked home loans; and new measures to protect consumers against hidden inflationary effects.

This powerful book is essential reading for anyone who wants to understand how we got into the subprime mess--and how we can get out.

  

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Review: The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It

User Review  - Ed Terrell - Goodreads

The Fed has been doing it since 1914 and the Bank of England has been doing it for 100s of years. Bailouts: Cui bono and who will suffer. Fair and unfair are far from clear-cut. Shiller, who is better ... Read full review

Review: The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It

User Review  - Justin Tapp - Goodreads

Shiller of the S&P/Case-Shiller home price index that's so closely watched. Shiller published this book in mid 2008, before much of the bad stuff happened. The books is very short with very large ... Read full review

Selected pages

Contents

Introduction
4
Housing in History
32
Bubble Trouble
42
The Real Estate Myth
72
A Bailout by Any Other Name
90
The Promise of Financial Democracy
118
Epilogue
174
Index
182
Copyright

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About the author (2008)

Robert J. Shiller is the Stanley B. Resor Professor of Economics at Yale University. Also the author of the award-winning "Macro Markets" as well as "Market Volatility", he lives in New Haven, Connecticut.

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