Old-fashioned economics has led to dangerously wrong-headed approaches to climate change and other “extreme event” situations, such as financial crises. In this highly accessible but profound book, Ackerman persuasively shows the urgency of smarter, more recent thinking about how natural and economic systems work and why we need to pay much more attention to worst cases. This is a must-read book for anyone who wants to understand the world we now inhabit.
– Juliet Schor, Boston College
Ackerman’s Worst-Case Economics will convince you that the conventional economic modeling of risk is inadequate when financial crashes, environmental collapse and other cataclysmic outcomes are possible and that policies based on prudence regarding the worst-case scenario are needed. An important book and a delight to read.
– Samuel Bowles, Santa Fe Institute
My latest book is now available: Worst-Case Economics: Extreme Events in Climate and Finance (Anthem Press, 2017). To describe it in brief:
The stock market and the climate are well-behaved most of the time – but those are not the times we worry about. Worst-case scenarios are all too real and all too common. The financial crisis of 2008 was not the first or the last to destroy jobs, homeownership and savings for millions of people. Ever-weirder weather includes megastorms clobbering communities from New York to Bangladesh, rising sea levels, and heat waves killing thousands across Europe.
Climate and financial crises are serious events, requiring vigorous responses. Yet public policy is trapped in an obsolete framework with a simplistic focus on average or likely outcomes rather than on dangerous extremes. What would it take to create better analyses of extreme events in climate and finance, and an appropriate policy framework for worst-case risks? Worst-Case Economics offers accessible and surprising answers to these crucial questions.
Order from Amazon, for the e-book. If Amazon continues to (mistakenly) suggest that the hard-copy book is not yet available, try either of two UK distributors that match Amazon’s price and offer free shipping to the US: Wordery or Book Depository. They’ll take about a week longer than Amazon would, if it was shipping the book immediately (which it isn’t). The publisher is working on fixing the misunderstanding at Amazon, hopefully this will be solved soon.