Photo: flickr / John Barker
With Europe on vacation in August as the euro crisis lingers unresolved, it may be a good time for the troubled countries’ leaders to catch up on some reading.UC Berkeley economist Barry Eichengreen has four must-reads for Europeans this summer, which he suggests in a piece on Project Syndicate:
- A Monetary History of the United States by Milton Friedman and Anna Schwartz. Eichengreen says that Friedman and Schwartz have an important message for the ECB – that they should buy bonds to head off bank failures instead of in reaction to bank failures.
- The World in Depression, 1929-1939 by Charles Kindleberger. Eichengreen basically recommends this one for the same reason – “The problem in the interwar period, as Kindleberger recounts it, was the reluctance of the leading power, the US, to provide the leadership and financial wherewithal to resolve the crisis.” He says Germany needs to likewise step up to the plate.
- Alexander Hamilton by Ron Chernow. Eichengreen explains that Alexander Hamilton faced the difficult task as Treasury Secretary of federalizing the debts of the new U.S. states after the revolutionary war. However, he was able to do it, and his story could be useful for European leaders who are trying to do a similar thing.
- The Guns of August by Barbara Tuchman. The Guns of August explains “how a series of individual decisions, all of which seemed sound when considered in isolation, had the unintended consequence of leading Europe into World War I.” While he isn’t predicting war, Eichengreen says “Europe is dangerously close to its financial Sarajevo.”