E-raamat: Financial Innovation: Too Much or Too Little?

In assigning blame for the recent economic crisis, many have pointed to theproliferation of new, complex financial products--mortgage securitization in particular--as being atthe heart of the meltdown. The prominent economists from academia, policy institutions, andfinancial practice who contribute to this book, however, take a more nuanced view of financialinnovation. They argue that it was not too much innovation but too little innovation--and the lackof balance between debt-related products and asset-related products--that lies behind the crisis.Prevention of future financial crises, then, will be aided by a regulatory and legal framework thatfosters the informed use of financial innovation and its positive effects on the economy rather thanquashing it entirely. The book, which includes two contributions from Robert Shiller as well as adiscussion of Shiller's "MacroMarkets" tool, considers the key ingredients of financialinnovation from both academia and industry; the positive potential but also the risks of financialinnovation and the influence of producers on consumers; rationality- and behavioral-based viewpointson the causes of the recent crisis; the link between the cycle of financial innovation and financialcrisis; and how future innovation-linked crises might be avoided.