Description
NOTE: This book is currently available for Pre-Order only.
In Neoclassical Economics – the only theory of economics that students are taught at university – there is no economic cycle, no unemployment, no recession, every market for every product is at a stable equilibrium – permanently, money is a mere medium of exchange that does not affect the economy, and therefore banks are also considered irrelevant. In reality, the Great Financial Crisis of 2008-09 demonstrated that banks can crash the global economy, and that unemployment, recession, and a distinct lack of equilibrium are the inevitable consequences.
In a rational world, if reality contradicts your theory, you throw out the theory, but the economics profession has a long history of throwing out reality instead. The result is a banking system that exploits the economy rather than supports it, an endless boom-and-bust cycle, unemployment, instability, and levels of inequality approaching those of feudal times. It doesn’t have to be this way. If we ditch the delusions of Neoclassical Economics, we can create a fairer, more stable, and more prosperous system for all.
This book charts how we got into this mess and, more importantly, explains how we can get out of it by making money and banking a central part of our understanding of the economy.
If we are willing to learn from Japan’s post-war economic miracle, Germany’s and America’s historic strength, and China’s recent economic rise, we can adopt similar policies and achieve comparable results. The future is
bright, but only if we learn from the past.
About The Author:
Karim Ayoubi spent three years studying economics at the University of Oxford in the mid-1990s. He went on to work for some of the big names in banking, including JP Morgan, Goldman Sachs and Chase Manhattan, where he found that what he had learned at university didn’t measure up to reality.
With his faith in economics in tatters, Karim embarked on a journey to understand what drives the economy and financial markets. Realonomics is the result of that search for truth, where reality and economics finally meet.
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Reviews
This is a provocative and well-written book which is accessible to the lay reader. It provides a critique of modern mainstream academic economics, persuasively arguing that insufficient understanding of how financial markets work and of their impact on the macroeconomy has damaged economic policy making. Its suggestions for how things can be improved are creative and controversial.
— Ken Mayhew Emeritus Professor of Education and Economic Performance, Oxford ⭐⭐⭐⭐⭐
Much of modern economic thinking is laced with contradictions, absurdities and blind spots – yet its flawed propositions are endlessly parroted until they are accepted by almost everyone. El-Ayoubi provides a robust critique of academic economics (a subject he was taught at university) from its unreasonable assumptions, through its untested hypotheses, to its divergences from empirical reality. In so doing, he reveals the flaws in such foundational concepts as supply and demand, the role of banks, money creation, interest rates and inflation, central banking and the prevalence of (destructively) destructive business cycles. His preferred framework, grounded in real-world observation, places a much greater focus on banks and their influence on the direction of the macroeconomy. In an ideal world, books like Realonomics: How the Economy Really Works and How We Can Fix It would be a mandatory accompaniment to the student’s diet of standard economic theory.
— Akhil Patel, author of The Secret Wealth Advantage ⭐⭐⭐⭐⭐
