Recommended Reading

These are resources that helped shape my understanding of both the current crisis and the history of central banking while researching The Alchemists. Taken together, they amount to a reading list for those hoping to understand the economic forces that have buffeted the world over the last few years, and the central bankers who have tried with mixed success to contain them.

On the origins of the current crisis, Bethany McLean and Joe Nocera’s All the Devils Are Here  is the most authoritative version of the “how we got here” story. Michael Lewis’s The Big Short is a quick and entertaining look at the idiosyncratic investors who bet against the mortgage securities that almost brought down the global economy. The best nonfiction accounts of the 2007-2008 phase of the crisis are David Wessel’s In Fed We Trust and Andrew Ross Sorkin’s Too Big to Fail which tell the story from the vantage point of the Federal Reserve and Wall Street titans, respectively. Memoirs by two key finance ministers of this period, Hank Paulson (On the Brink) and Alistair Darling (Back from the Brink), are important pieces of the historical record as well.

For a more dramatic telling, try the movie version of Too Big to Fail or the fictional-but-realistic movie Margin Call. Both are more riveting than a movie about financial calamity has any right to be.

For the detailed story of the crisis that has enveloped Europe since 2010, threatening to undo half a century of progress toward a united Europe, Carlo Bastasin’s Saving Europe, published in 2012, is the most detailed treatment to date, including the work of European Central Bank president Jean-Claude Trichet. Michael Lewis’s Boomerang is a more impressionistic, unfair, and hilarious account of a troubled Europe. Dan Conaghan’s The Bank tells the full story of the Bank of England under the reign of Sir Mervyn King.

To understand the world’s contemporary challenges, it helps to understand some key moments in economic history, which I deal with in some detail in The Alchemists. For further reading, Walter Bagehot’s Lombard Street: A Description of the Money Market remains surprisingly engaging and understandable to the modern reader. There is a reason that nearly 150 years after it was published it remains something of a bible for central bankers. Geoffrey Elliott’s The Mystery of Overend & Gurney tells the detailed story of the proto–Lehman Brothers. Robert F. Bruner and Sean D. Carr tell the story of the financial crisis that led to the creation of the Fed in their The Panic of 1907, and H. W. Brands’s The Money Men is a brief history of American central banking up to that point.

Ben Bernanke once wrote that “to understand the Great Depression is the Holy Grail of macroeconomics,” and fortunately there is a wealth of both popular and scholarly efforts to do just that. Liaquat Ahamed’s Lords of Finance covers the era through the window of its leading central bankers. Adam Fergusson’s When Money Dies is a brisk and accessible account of the German hyperinflation of the early 1920s, and Gerald D. Feldman’s The Great Disorder an exhaustive and authoritative version. On the economics of the Great Depression, A Monetary History of the United States by Milton Friedman and Anna Jacobson Schwartz is hard to surpass, and Charles Kindleberger’s The World in Depression and Barry Eichengreen’s Golden Fetters also offer rich pictures of the period.

On the creation of the eurozone, David Marsh’s The Euro and Otmar Issing’s The Birth of the Euro are essential reading, and Kenneth Dyson and Kevin Featherstone’s The Road to Maastricht is a richly detailed scholarly account. John Maynard Keynes’s Economic Consequences of the Peace was written in 1919, yet is essential reading for anyone wishing to understand European history in the century since.