The Road to Recovery: How and Why Economic Policy Must Change

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John Wiley & Sons, Oct 14, 2013 - Business & Economics - 360 pages
2 Reviews

“This remarkable work deserves the widest possible audience. I cannot recall a text so full of astonishing evidence, sharp insights and unconventional arguments. Smithers quotes Cassandra as a kind of role model. She has ‘the three typical attributes of a sound analyst: Her forecasts were correct; she made no claim about their timing and her views were invariably ignored.’ The last condition must be avoided at all costs.”
Jonathan Steinberg, Walter H. Annenberg Professor of Modern European History, University of Pennsylvania, Philadelphia

“With Western economies continuing, at best, to move sideways in the aftermath of the ‘Great Recession’, despite conventional fiscal and unconventional monetary policies, in his new book Andrew Smithers identifies the missing ingredients to economic recovery. To do so he draws impressively, in his scholarly yet entertaining style, on both economic theory and historical data, lambasting policymakers for their reliance on defunct theory. A must-read, offering an illuminating insight into current economic debates.”
James Mitchell, Professor of Economic Modelling and Forecasting, Warwick Business School, University of Warwick

“Andrew Smithers’s latest book is tough, argumentative, entertaining and deep. It is all that you would expect from someone with his long track record of incisive thought, iconoclasticism, and – as Martin Wolf’s foreword reminds us – simply being right most of the time. The core of this book is the argument that the way we pay managers in the USA and UK is drastically distorting the economy, and that this will be a major impediment to sustainable recovery.

Andrew’s arguments are not just abstract theorising. Everything he says is backed up with data (the book contains no less than 128 charts), many of which reveal features of the economy that most of us either never knew, or would prefer to forget.

Those who take themselves too seriously, and do not like to see their own analysis drastically undermined, will not like this book at all. But those who want to take arguments back to first principles, and are prepared to address new ideas and new data, will find it a rich source of brain food.”
Stephen Wright, Professor of Economics, Birkbeck College, University of London

“This book is a tour de force that combines original thought, a wealth of empirical material, and a lifetime’s experience of financial markets and public policy. Andrew Smithers has an extraordinary ability to address academics, finance ministers, central bankers and the corporate sector in a manner that challenges the core assumptions and institutional failings of each.

Andrew Smithers predicted the current economic and financial crisis repeatedly, which gives his powerful thinking the force of prophecy.  And while central banks might have been foolish to ignore his insights – for example that asset prices can indeed become overvalued or that the bonus culture is as destructive to the value of corporations as it is entrenched - they would be irresponsible to do so yet again.”
Simon May, Visiting Professor of Philosophy, King's College London

“Andrew Smithers has never been afraid of challenging conventional thinking and offering his own solutions to issues central to our economic well-being. He does so from the relatively rare standpoint of a strong, analytical mind and a wealth of experience in the real financial world. In this latest book, he again develops his arguments cogently and with aplomb.  Readers will find much to reflect upon and enjoy in this latest book. It is no surprise that Andrew’s output over the years is so widely quoted in the serious financial press.”
Dimitri Vayanos, Professor of Finance/Director of the Paul Woolley Centre for the Study of Capital Market Dysfunctionality, London School of Economics

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Review: The Road to Recovery: How and Why Economic Policy Must Change

User Review  - Robert J. - Goodreads

This is a hard book to review. I think Smithers is correct in his analysis; he's not tilting at windmills, but he might as well be. I don't think there's the slightest chance that regulators and ... Read full review

Review: The Road to Recovery: How and Why Economic Policy Must Change

User Review  - Steven Peterson - Goodreads

Andrew Smithers examines current economic policy, in the wake of the recent recessionary meltdown, to determine what happened and what changes might be made to reduce the likelihood of such problems ... Read full review

About the author (2013)

Andrew Smithers is Chairman of Smithers & Co. Ltd. and is a leading expert on financial economics and global asset allocation. His forty–five years’ experience in international investment includes twenty–five years at SG Warburg & Co where, amongst other roles, he ran the investment management division, and over twenty years as head of his own investment consultancy firm, Smithers & Co, based in London. He is the co–author of three books on international finance: Valuing Wall Street , co–written with Stephen Wright, published in 2000; and Japan’s Key Challenges for the 21st Century , co–written with David Asher, published in 1999. His book Wall Street Revalued – Imperfect Markets and Inept Central Bankers was published by John Wiley & Sons, Ltd. in July, 2009. He is also the author of Chapter 6, “Can We Identify Bubbles and Stabilize the System?” in The Future of Finance: The LSE Report , published by The London School of Economics and Political Science in September, 2010. Andrew is a Trustee of the Daiwa Anglo–Japanese Foundation, a Fellow of CFA (UK) and member of the Advisory Board for the Centre for International Macroeconomics and Finance (CIMF) at Cambridge University. As head of Smithers & Co., Andrew has helped pioneer the application of academic analysis of financial economics to investment management. He is well known for his work on valuing markets, including application of ‘q’, for his pioneering studies on the distorting impact of employee stock options on US profits, and for work on showing the understatement of Japanese published profits compared with US ones. www.smithers.co.uk

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