Scott Sumner, The Midas Paradox: Financial Markets, Government Policy Shocks, and the Great Depression. Oakland, CA: Independent Institute, 2015. 524 Pages. USD 37.95 (cloth)
For a topic that has been as thoroughly researched as the Great Depression, it is difficult to imagine a book that makes as significant of a contribution to our understanding as Scott Sumner’s, The Midas Paradox: Financial Markets, Government Policy Shocks, and the Great Depression. Sumner’s contribution relies on a thorough investigation of investor expectations. While he pays heed to “rational expectations,” he provides context and, within that context, varying interpretations of changes in policies and circumstances. What Sumner lacks in terms of comprehensive meta-theoretical structure he makes up for with a thoughtful framing of a plethora of quantitative and qualitative data. In doing so he identifies a number of plausible arguments for the data presented and casts his vote for what seems to him to be the best supported hypothesis.
Though he identifies a number of contributing factors, Sumner indicts persistent shocks in the gold and labor markets as being primarily responsible...
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