by Suman Gupta
A Thought-Provoking Book on the Financialisation of the Global Economy
New Delhi, 11 November 2019: Ms. Nirmala Sitharaman, Hon’ble Finance Minister, Government of India unveiled ‘The Rise of Finance: Causes, Consequences and Cure’, a book co-authored by V. Anantha Nageswaran, Dean of IFMR Graduate School of Business at Krea University and Gulzar Natarajan, Senior Managing Director, Global Innovation Fund, in the city today. Bibek Debroy, Chairman, Economic Advisory Council to the Prime Minister, was also present during the unveiling and received the first copy of the book. The book examines the rise of financialisation globally, while charting its drawbacks and prescribing suggestions for a definitive overhaul of the structure.
‘The Rise of Finance: Causes, Consequences and Cure’ traces the political and economic factors that gave rise to the disproportionate influence and importance of the financial sector and financial markets in advanced economies. It documents, with ample evidence, the undesirable consequences of the dominance of finance on societies and on economies. Much of the current discontent and angst in developed and developing countries can be attributed to the rise of finance.
While unveiling the book, Ms. Nirmala Sitharaman, Hon’ble Finance Minister, Government of India said, “While unveiling the book, Ms. Nirmala Sitharaman, Hon’ble Finance Minister, Government of India said “I think this is a must-read book by all those who want to understand the current economic situation facing both the world and Indian economy. Three very important points of this book are, here is a book that talks about Economics with zest, with a force of argument that makes it racy to read, especially due to the language and the style of writing by the authors. As a textbook, I am sure it will become very popular and more importantly, this will be a book that is very relevant to those of us, sitting on the policy making table Secondly, its relevance and the timing of the launch of the book in India. We are currently facing a challenging time. Here is a book that has come at a time when questions are being asked about the nature of the slowdown which is affecting the global economy and bogging it down and indeed questioning if India is actually in a slowdown. Thirdly, the book examines the rise of financialisation globally. I really commend the prescriptive and descriptive narrative that supports the topic of financialisation and the solutions that have been prescribed for situations that the world and Indian economy is currently facing. The rigour with which this book has been written is amazing.”
Bibek Debroy, Chairman, Economic Advisory Council to the Prime Minister said, “this is a fascinating and well written book on global finance and the rise in its importance, it goes beyond the descriptive and also deals with the prescriptive. The book gives us interesting insights on what regulatory systems and policies can do to deal with capital flow which are often cross-border in nature. The chapters on inequality and a chapter that links it with the Indian experience is particularly interesting.”
In his foreword to the book, Y V Reddy, former Governor of the Reserve Bank of India said that the authors have taken upon themselves the ambitious task of bringing together a complex reality of multiple disciplines, through processes and sources and have succeeded in weaving them together into a cogent narrative, culminating in a set of interesting and bold recommendations.
In his review of the book Dr. Manohar Swaminathan of Microsoft Research termed ‘The Rise of Finance: Causes, Consequences and Cure’ as a must-read for anyone with more than a passing interest in the world of money and finance. He noted that the book connected all the disparate dots in his mind – stock buybacks, dollar as reserve currency, fiat currency, housing bubbles, derivatives and algorithmic trading – into a compelling and cohesive narrative.
Anantha Nageswaran, Dean of IFMR Graduate School of Business at Krea Universitysaid, “this book tells the story of how finance came to dominate economies, our lives and the evolution of societies disproportionately heavily from the 1980s. Finance had been dominant before, and on those occasions too, it had caused grief. Our purpose in this book is not to present a history of finance from its origins. It is to tell the story of how this happened, what or who caused it, what are its consequences and what is the cure. We consider the rise of finance to such staggering levels as a disease that the world is suffering from”.