Subprime Solution: How Today's Global Financial Crisis Happened and What to Do about It, Princeton University Press, 2008.
This book presents an analysis of the financial crisis that began with problems in the U.S. subprime mortgage market in 2007, and which spread around the world to become the biggest financial crisis since the Great Depression. The book offers a number of proposed measures to deal with the crisis, built around the theme of democratizing finance. The book argues for taking a number of measures to improve the information infrastructure, as, for example, subsidizing financial advice for individual investors. It advocates broadly expanding the scope of financial markets, to enrich the opportunities for risk management. It advocates improving the array of financial products available to individuals, including such innovations as continuous workout mortgages that build in risk management to the mortgage contract.
The New Financial Order: Risk in the 21st Century, Princeton University Press, 2003.
This book proposes a radically new risk management infrastructure to help secure the wealth of nations: to preserve the millions of minor, and not so minor, economic gains that sustain people around the world. Just as modern systems of insurance protect people against catastrophic risks in their lives and professions, the proposed new infrastructure would utilize financial inventions to protect people against systematic risks: from job losses due to changing technologies to threats to homes and communities due to changing economic conditions. If successfully implemented by progressive businesses and governments, this newly proposed infrastructure would enable people to pursue their dreams with greater confidence than allowed by our existing modes of risk management. Without such a means to greater security, it will be difficult for young people, whose ideas represent the raw materials for a growth-oriented society, to take the risks necessary to convert their intellectual energies into useful goods and services for society.
Macro Markets: Creating Institutions for Managing Society's Largest Economic Risks, Oxford University Press, 1993.
It is proposed that a new class of markets, macro markets, markets for claims on aggregate income and service flows, be established. These markets would help people to manage the biggest economic risks facing society. Our existing financial markets are inadequate to deal with such risks. Our stock markets are markets for claims on corporate dividends, and yet the latter are only a few percent of national incomes, only 3 percent in the United States. The proposal here is to establish liquid international markets for claims on the other 97 percent. These would include markets for national incomes, components and aggregates of national incomes, and real estate. Establishing such unprecedented new markets presents some technical problesm which this book attempts to solve. There are proposals for perpetual futures market design, and for new index number construction methods for cash settlement of contracts.
Home Equity Insurance with Allan Weiss.
Labor Income Indices for Use in Contracts Promoting Income Risk Management with Ryan Schneider.
World Income Components: Measuring and Exploiting International Risk Sharing Opportunities with Stefano Athanasoulis.
Mortgage Default Risk and Real Estate Prices: The Use of Index-Based Futures and Options in Real Estate with Karl Case.
The Significance of the Market Portfolio with Stefano Athanasoulis.
Expanding the Scope of Individual Risk Management: Moral Hazard and Other Behavioral Considerations.
Indexed Units of Account: Theory and Assessment of Historical Experience.
Designing Indexed Units of Account.
Moral Hazard and Home Equity Conversion with Allan Weiss.
"Social Security and Institutions for Intergenerational Intragenerational and International Risk Sharing,"
"Macro Markets and Financial Security," with Stefano Athanasoulis and Eric van Wincoop.
"Social Security and Risks to Our Incomes in the Long Term,".
Robert J. Shiller
Cowles Foundation for Research in Economics
30 Hillhouse Avenue
New Haven, CT 06511
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