Macroeconomics For Dummies®, uk edition Published by: John Wiley & Sons, Ltd

Part V: Understanding the Financial Crisis


Chapter 14: Considering Fundamental


Weaknesses of the Financial System

Understanding Weaknesses in the Financial System

Finding Out about Fractional Reserve Banking


Catching a Cold! Systemic Risk


Chapter 15: Getting Away with Excessive Risk-


Taking: Moral Hazard


Banks Behaving Badly: Watching Out for Moral Hazard Avoiding Financial Armageddon: Bailouts Providing Incentives for Excessive Risk-Taking Committing to No Bailouts (Dream On!)


Chapter 16: Considering the Lessons of the 2008 Financial Crisis


Delving into the Global Financial Crisis


Asking Why Economists Didn’t Predict the Crisis


Trying to Stop the Next Crisis


Part VI: The Part of Tens


Chapter 17: Getting to Know Ten Great


Macroeconomists


Adam Smith (1723–1790)


John Maynard Keynes (1883–1946)


Milton Friedman (1912–2006)


Paul Samuelson (1915–2009)


Robert Solow (born 1924)


Robert Lucas (born 1937)


Edward Prescott (born 1940)


Robert Barro (born 1944)


Robert Hall (born 1943)


Janet Yellen (born 1946)


Chapter 18: Ten Top Tips to Take Away


Factoring in Factors of Production


Paying Factors of Production Their Marginal Products


Understanding that Excessive Growth in the Money Supply Causes High Inflation


Minimising Unemployment (Though Some Is Inevitable)

Stimulating Aggregate Demand Can Increase Output Only in the Short Run

Accepting that Financial Crises Are Certain and Impossible to Predict


Seeing that No Trade-Off Exists between Inflation and Unemployment in the Long Run


Discovering Why Policy Makers Should Constrain Themselves


Fixing the Financial System without Solving Moral Hazard Is Impossible


Recognising that, Ultimately, Real Things Are What Count


About the Authors


Cheat Sheet


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