The Economics of Financial Markets and the 1987 Crash

"The Economics of Financial Markets and the 1987 Crash" is a systematic account of the antecedents and economic consequences of the stock market crash of 1987 in the world's major financial centres. In determining the causes of that crash, Jan Toporowski examines the way in which finance and capital markets operate and concludes that the crash was an economically insignificant event in the general inflation of capital markets Dr Toporowski argues that rather than the crash itself, it was that capital market inflation that eventually contributed to the economic slump of the 1990s. In so doing, he presents original theories on finance and capital markets, banking cycles, financial regulation and the economic consequences of deregulation. The book also features a critique of Keynes's liquidity preference theory and an account of how Japanese financial institutions saved Wal Street and the London market after the crash. Written by an economist with an "insider's" view of finance and capital markets - the author was formerly senior economist with Standard Chartered Bank - this book presents a theoretical analysis which explains how markets actually work. "The Economics of Financial markets and the 1987 Crash" should be welcomed by economists, financiers and policy makers concerned with issues of financial instability and the financial roots of economic stagnation.