Peter M. Garber

Peter M. Garber is Global Strategist at Global Markets Research of Deutsche Bank.

  • Famous First Bubbles

    Famous First Bubbles

    The Fundamentals of Early Manias

    Peter M. Garber

    The jargon of economics and finance contains numerous colorful terms for market-asset prices at odds with any reasonable economic explanation. Examples include "bubble," "tulipmania," "chain letter," "Ponzi scheme," "panic," "crash," "herding," and "irrational exuberance." Although such a term suggests that an event is inexplicably crowd-driven, what it really means, claims Peter Garber, is that we have grasped a near-empty explanation rather than expend the effort to understand the event.

    In this book Garber offers market-fundamental explanations for the three most famous bubbles: the Dutch Tulipmania (1634-1637), the Mississippi Bubble (1719-1720), and the closely connected South Sea Bubble (1720). He focuses most closely on the Tulipmania because it is the event that most modern observers view as clearly crazy. Comparing the pattern of price declines for initially rare eighteenth-century bulbs to that of seventeenth-century bulbs, he concludes that the extremely high prices for rare bulbs and their rapid decline reflects normal pricing behavior. In the cases of the Mississippi and South Sea Bubbles, he describes the asset markets and financial manipulations involved in these episodes and casts them as market fundamentals.

    • Hardcover $42.50 £35.00
    • Paperback $24.95 £20.00
  • Speculative Bubbles, Speculative Attacks, and Policy Switching

    Speculative Bubbles, Speculative Attacks, and Policy Switching

    Peter M. Garber and Robert P. Flood

    The papers in this book are grouped into three sections: the first on price bubbles is primarily financial; the second on speculative attacks (on exchange rate regimes) is international in scope; and the third, on policy switching, is concerned with monetary policy.

    Robert Flood and Peter Garber confess to a "fixation on understanding extreme events" such as speculative bubbles, currency reforms, and speculative attacks on fixed exchange rate regimes and metallic monetary standards—all markers of economic change. This book brings together their research in these areas during the 1980s and early 1990s, highlighting in particular the close relation of their work on bubbles to that of policy switching, or understanding the impact of prospective and past policy changes on individual economic behavior.Among the earliest contributors to the policy switching literature, Flood and Garber note that policy switching has become popular because the approach permits economists to come to grips with peculiar behavior that surrounds crises and other discrete events. The approach has also allowed economists to combine their understanding of economic behavior in times of crisis with observations of behavior during more normal times.The papers in the book are grouped into three sections: the first on price bubbles is primarily financial; the second on speculative attacks (on exchange rate regimes) is international in scope; and the third, on policy switching, is concerned with monetary policy.

    • Hardcover $85.00 £70.00
    • Paperback $40.00 £32.00

Contributor

  • International Currency Exposure

    International Currency Exposure

    Yin-Wong Cheung and Frank Westermann

    Issues in debates about foreign currency exposure—the denomination of liabilities or assets in foreign currency.

    The foreign currency denomination of contracts in international transactions can lead to international currency exposure at the country level with important economic and policy implications. When debts are denominated in foreign currency and revenues in domestic currency, exchange rate fluctuations can result in balance sheet effects for countries with either net asset or liability positions. Moreover, currency mismatch between assets and liabilities can be a cause for crises in developing and emerging economies. This book looks at the issues surrounding foreign currency exposure in today's increasingly integrated world economy.

    The contributors draw on cross-country as well as country-specific data. They consider international currency risk after the Swiss franc ended its one-sided peg with the euro, for example, and the foreign exchange positions of firms in Turkey and Russia. Other contributors take macroeconomic perspectives, examining the potential effects of exchange rate realignment, the pressure to appreciate on countries with current account surpluses, and the currency exposure in international trade. Finally, contributors consider the issue from finance and political economy perspectives, addressing the phenomenon of the forward premium puzzle and discussing geopolitical aspects ascending currencies.

    Contributors Fatih Altunok, Huseyin Aytug, Agustín S. Bénétrix, Jörg Breitung, Paul De Grauwe, Eiji Fujii, Peter Garber, Juann H. Hung, Signe Krogstrup, Philip R. Lane, Katja Mann, Arif Oduncu, Gunther Schnabl, Maria V. Sokolova, Cédric Tille

    • Hardcover $40.00 £32.00