A reading list by Barry Eichengreen obviously connected to what Europeans should be reading to end their crisis.
- Milton Friedman’s and Anna Schwartz’s A Monetary History of the United States: Crticised Fed’s failure to initiate a concerted program of security purchases in the first half of 1930 in order to prevent large bank failures. ECB promised on Aug 2 but has not done anything till now.
- Charles Kindleberger’s The World in Depression, 1929-1939: Kindleberger’s point is that avoiding a crisis – and when failing to avoid one, successfully exiting from it – requires leadership. Germnay should take leadership now but is not
- Ron Chernow’s biography of Alexander Hamilton: How he built the US fiscal union in extremely trying times..
- Barbara Tuchman’s The Guns of August: Tuchman describes how a series of individual decisions, all of which seemed sound when considered in isolation, had the unintended consequence of leading Europe into World War I.
On last he adds:
No one is predicting war in Europe today. But what is true of international diplomacy – that a series of seemingly reasonable decisions can have cataclysmic consequences if no one bothers to figure out the endgame – is equally true of international finance. Europe is dangerously close to its financial Sarajevo. The continent’s leaders, while relaxing on southern Europe’s crisis-ridden shores, should take Tuchman’s message to heart.