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After the Flood

How the Great Recession Changed Economic Thought

The past three decades have been characterized by vast change and crises in global financial markets—and not in politically unstable countries but in the heart of the developed world, from the Great Recession in the United States to the banking crises in Japan and the Eurozone. As we try to make sense of what caused these crises and how we might reduce risk factors and prevent recurrence, the fields of finance and economics have also seen vast change, as scholars and researchers have advanced their thinking to better respond to the recent crises.

A momentous collection of the best recent scholarship, After the Flood illustrates both the scope of the crises’ impact on our understanding of global financial markets and the innovative processes whereby scholars have adapted their research to gain a greater understanding of them. Among the contributors are José Scheinkman and Lars Peter Hansen, who bring up to date decades of collaborative research on the mechanisms that tie financial markets to the broader economy; Patrick Bolton, who argues that limiting bankers’ pay may be more effective than limiting the activities they can undertake; Edward Glaeser and Bruce Sacerdote, who study the social dynamics of markets; and E. Glen Weyl, who argues that economists are influenced by the incentives their consulting opportunities create.

304 pages | 17 halftones, 19 line drawings, 15 tables | 6 x 9 | © 2017

Economics and Business: Economics--Government Finance


After the Flood covers an impressive breadth of topics—fitting for a book in honor of well-respected economist José Sheinkman’s contributions. Many of the essays deal with an important topic in Sheinkman’s recent research: the regulation and social value of financial institutions. Leading scholars in the field—some of them Scheinkman’s collaborators, including Tano Santos, Patrick Bolton, Albert S. Kyle, Aloisio Araujo, Rafael Ferreira, and Bruno Funchal—provide thoughtful essays, which will significantly advance the field.”

Eduardo Azevedo, Wharton School, University of Pennsylvania

“For this important collection of essays in honor of José Sheinkman, the editors have brought together a truly impressive team of international contributors who, together, provide a coherent, thought-provoking, and well-written analysis of the causes of the recent financial crises. After the Flood will be tremendously useful to researchers and graduate students.”

Alberto Bisin, New York University

Table of Contents

Chapter 1. Introduction
Edward L. Glaeser, Tano Santos, and E. Glen Weyl

Chapter 2. Stochastic Compounding and Uncertain Valuation
Lars Peter Hansen and José A. Scheinkman

Chapter 3. The Good Banker
Patrick Bolton

Chapter 4. How to Implement Contingent Capital
Albert S. Kyle

Chapter 5. Bankruptcy Laws and Collateral Regulation: Reflections after the Crisis
Aloisio Araujo, Rafael Ferreira, and Bruno Funchal

Chapter 6. Antes del Diluvio: The Spanish Banking System in the First Decade of the Euro
Tano Santos

Chapter 7. Are Commodity Futures Prices Barometers of the Global Economy?
Conghui Hu and Wei Xiong

Chapter 8. Social Learning, Credulous Bayesians, and Aggregation Reversals
Edward L. Glaeser and Bruce Sacerdote

Chapter 9. Finance and the Common Good
E. Glen Weyl

List of Contributors

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