73 books like Inflation and Unemployment

I recommend this book because it deals with the main problems faced by capitalist economies, inflation, and unemployment, in a new and original way, and provides the theoretical foundations for quantum macroeconomic analysis.

Orthodox economics has failed to provide a consistent insight into the pathologies blighting our economies, and both the academic and the economic worlds badly need an alternative approach to convincingly diagnose these pathologies, where they come from, and how they can eventually be disposed of.

Schmitt’s volume provides a revolutionary explanation of the cause of today’s economic disorder as well as an innovative solution enabling for the passage from disorder to order.

When I first met him at the University of Fribourg, Switzerland in 1969, I was immediately fascinated by Bernard Schmitt’s passion for scientific research and by his novel approach to monetary macroeconomics.

Three years later I started working with him as a teaching and research assistant and went on working as his closest collaborator until his death in 2014. The other two co-editors of this book also had the privilege to work closely with him.

Conceived as an homage to Schmitt’s legacy, this book is a collection of contributions explaining the historical origin, the analytical content, and the current relevance of Schmitt’s quantum macroeconomic analysis.

The book brings together a series of contributions to monetary macroeconomics as well as Bernard Schmitt’s last critique to relative price determination.

I recommend it to the reader interested in monetary theory because it gives an overview of the most challenging topics in this field, from money to financial crisis, passing through profit formation, inflation, and unemployment.

International issues are also considered, while a groundbreaking analysis of sovereign debt and interest payments is presented in what was to become Schmitt’s last contribution in English to international macroeconomics.

I recommend this book to any reader interested in the possible cross-fertilization between diverse heterodox traditions in the study of money.

Bringing together perspectives from post-Keynesians, Circuitists, and the Firbourg-Dijon School, the book continues the tradition of Keynes’s and Kalecki’s analysis of a monetary production economy, emphasizing the similarities between the various approaches, and expanding the analytical breadth of the theory of endogenous money.

The authors aim to open new avenues of monetary research and fuel renewed interest in the nature and role of money in capitalist economies.

Most economists associate volume of money with price-level (inflation/deflation), not Keynes.

For him, a macro price-level does not reveal the unsynchronized dynamics affecting the prices of its components: commodities, labor, capital, raw materials, profits; it must be decomposed.

When FunCorp invests in a rollercoaster, its decision is based on present costs and future returns (ticket sales, performance, stock options, etc.).

Windfall profits will lead to more expansion; losses, to curtailed activity. Both expansion, contingent on easy credit, or recession, on the tightening of credit, depend on bankers’ use of individuals’ savings and their creation of more deposits.

For Keynes, an institutionalised banking system is essential for a modern economy but he advocated, in the public interest, for strict rules on bankers’ abuse of credit, to mitigate the inflation/deflation rollercoaster. 

Sargent shows how the monetary excesses leading to inflation have often been connected to using money to cover government budgetary shortfalls. This is vividly illustrated in chapter 3 by the way that ending the post-World War I hyperinflations required fundamental fiscal as well as monetary reform. 

Sargent also convincingly demonstrates the power of expectations and the idea that, as government behavior changes, people’s behavior adjusts as well.

You really cannot argue with the Ancient Chinese proverb included on the first page: “The government has strategies. The people have counterstrategies.” Amidst the rich trove of historical cases, my favorite remains chapter 6’s interpretation of the interactions between President Ronald Reagan and a recalcitrant US Congress in the early 1980s as a “game of chicken.” 

Grappling with the meaning of money and unraveling its impact on prices or on the creation of wealth is enduringly controversial.

Fascination with money - to eyes or pockets - is universal. Fisher understood this!

He defined money simply as what is acceptable in exchange for goods: bills, coins, cheques - legal tender - or other forms of debt.

Since inflation, for Fisher, is a monetary phenomenon, and as in classical physics, where one matter is equalised to another, in his economics, money-on-the-move is always balancing products-for-a-price; in the long run, too much money or too little does not affect wealth creation but only the level of price.

Fisher is a ‘must read’ because this, his ultimate conclusion, deprived of his many subtleties, is the basis of present macroeconomics.

Bernholz, a renowned Swiss Economics professor, builds upon Friedman to provide an unparalleled view of how budget deficits and high government spending end up being financed by the “inflation tax” of printing money to cover the deficits.

Throughout history back some two thousand years, Bernholz describes ancient and modern monetary regimes based on metallic standards and fiat money unbacked by any metal. He analyzes how increased money supply causes moderate, high, and hyper-inflations throughout this history. He provides dozens of historical examples of money and inflation in times of crises including war.

Bernholz adds the dimension of how international exchange rates are affected during rising inflation and when deflation ultimately occurs. He shows how different “laws” regulate behavior, with good money driving out bad money until the bad money collapses in value and then good money is created or imported that drives out the bad money to its extinction. Bernholz… show more.

This is a unique way of saving money by engaging in some extra creative activities, and thereby earning money from them outside of your normal salary/income.

For instance, this is similar to an employee or business owner having their own side hustle. Extra ways to earn money are also covered, and when you have saved in $1K parcels; then that money goes towards the relevant goal you have set for yourself.

The author uses her $1K parcels to buy shares. 

This book is perhaps one of the best-kept secrets in economics, overshadowed by Keynes’ more path-breaking General Theory, but oozing with wisdom on every page. Here Keynes transcends the bounds of economics. In his words: “It is one of the objects of this book to urge that the best way to cure this mortal disease of individualism is to provide there shall never exist any confident expectation either that prices are generally going to fall or that they are going to rise; and also that there shall be no serious risk that a movement, if it does occur, will be a big one.” Of course, inflation is the subject here. Its writing style alone elevates it above the commonplace. In this book, the reader finds the balance of practical judgment found in the best economists.