Macro Markets
Asserting that we have substantially inadequate financial markets, celebrated economist Robert Shiller lays out a unique set of proposals for marketizing the biggest economic risks dealt by the society today. The new markets could reduce the impact of international economic fluctuations and drop the inequality of wealth. Shiller suggests new international markets for claims, components and aggregates of national incomes, and for property such as real estate. He contends that these markets might dominate our stock markets in their activity and import. He confronts the common presumption that any new market would be impracticable, by offering solutions to technical problems of measurement and settlement. There are proposals for implementing markets in perpetual claims and a substantial section on the construction of index numbers for use in settlement in the new markets.
"[A] terrific book....Fresh, provocative, well written, and well argued. [Recommended] not only to financial and macro-economists, but to the larger economic community interested in the character and costs of business cycles."
— Journal of Economic Literature
"The book, unique in its approach...offers an unusual combination of passionate advocacy with precise theoretical reasoning....This excellent book does more than provide a good treatment of some self-contained and specialized questions. It is also likely to initiate a research program. For what Shiller has done is to imagine a sometimes surprising and unfamiliar world in which risk-hedging and risk-spreading markets, while not necessarily complete, are at least a great deal more complete than they are at present."
— The Economic Journal
"A brilliant new book that I highly recommend."
— Peter L. Bernstein, Journal of Portfolio Management