Robert Shiller

The re­cent world­wide fi­nan­cial cri­sis pales in com­par­i­son with ear­li­er “bub­bles” pro­mot­ed by to­tal­i­tar­i­an regimes.

Ac­cord­ing to re­cent stud­ies, in most cas­es spend­ing cuts have a ten­den­cy to weak­en economies.

Much of mod­ern eco­nom­ic and fi­nan­cial the­o­ry is based on the as­sump­tion that peo­ple are ra­tio­nal, says au­thor.

The drop in eco­nom­ic con­fi­dence was sharp­er in July 2011 than it was in 2008, due to fears of a US debt de­fault.

Debt-to-GDP ra­tios should be less of a con­cern than our in­abil­i­ty to see these in­di­ca­tors as ar­ti­fi­cial and ir­rel­e­vant.

Japan could have mit­i­gat­ed fi­nan­cial fall­out with prop­er cat­a­stro­phe in­sur­ance, such as GDP “trill” bonds.

By 2010, US farm prices fell only 5 per cent from their 2008 peak, com­pared with 37 per cent for home prices.