The Leaderless Economy: Why the World Economic System Fell Apart and How to Fix It

Two highly regarded economists, MIT’s Temin (Prometheus Shackled) and Oxford University–Balliol College’s Vines (The IMF and Its Critics), examine the evolution of Keynesian thought since the 1920s and discuss cures for today’s multinational unemployment, debt, and other economic problems. Exports and balance of trade, exchange rates, fiscal policy, and interest are among their moving parts. Conflicting solutions among nations worsen the economic crisis, they fear. As during the 1930s, the global economy no longer has a universally recognized leader or hegemon, yet international cooperation is essential to global industrial recovery. Temin and Vines explain why this is easy to say but hard to achieve, reviewing poor macroeconomic choices that have equal political traction with good ones. A powerful chapter on the American century and financial crisis since 2008 explores U.S. reversals and capacity for future global leadership. In addition, China’s “export-led development strategy” and emergent geoeconomic role get a close look. Saddled with a bland (and arguably misleading) title, Temin and Vines’s measured analysis will reward serious readers and economists who can keep up with global theory in motion. However, policy spinners looking for painless, politically popular remedies for high unemployment rates and deflationary trends will come away empty-handed. (Feb.)