*Risk and Business Cycles* is now available in paperback

That is my 1998 book on business cycles.  Mario Rizzo writes:

I am happy to report that Tyler Cowen’s book, Risk and Business Cycles: New and Old Austrian Perspectives  is now available, as of July 15th, in a reasonably-priced paperback edition from Routledge…

This is not an orthodox Austrian approach. In fact, Cowen criticizes that version. However, the “new Austrian” inspired version he presents seems especially relevant in view of the widespread, but not uiversal, agreement that the pre-recession period of very low interest rates contributed to the search for yield and greater risk taking. As the title indicates, Cowen’s theory emphasizes the importance of low interest rates on risk-taking.

This book appears in the Routledge series, “The Foundations of the Market Economy” edited by Larry White and me. Tyler’s book is well worth reading as are many books in this series (now approaching thirty books).

Here is another blog post discussing the book.  Here is the Amazon listing.  At the time this book was published, it was unpopular to suggest that everyone simply might take too much risk at once, leading to an eventual overextension and collapse.  Yet theories of that nature have held up relatively well, in light of the financial crisis.

My one-sentence summary of the book is that it offers various accounts of how an economy might end up in the position of taking too much risk and how that can help explain business cycles.  And since these scenarios involve risk, rather than direct negative productivity shocks, they can look fairly innocuous in advance.