Hidden Collective Factors in Speculative Trading: A Study in Analytical Economics Second Edition 2009 Edition

From the reviews of the first edition:

“This book promises a lot. … I found myself quite fascinated by the multitude of market events which are tabulated and carefully related to each other. … The book is an excellent example of why the econophysics approach is so very welcome in the finance field. … the book in general is an interesting and satisfying read.” (Jessica James, Quantitative Finance, November 2001)

What are the roots of the present economic crisis? The book shows that the factors commonly mentioned (e. g. subprime loans, fall in housing prices) have occurred in the past and therefore cannot account for the severity of the present crisis. There must be “something else”. The analysis shows that there was a “phase transition” in the United States around 1975 which brought the following changes: – The stagnation of real wages over the past 30 years and a parallel rise in indebtment levels. – The abrupt fall in unionization rates and in the number of strikes. – The development of tax havens which deprived states of tax revenue. – The globalization of financial transactions which hinders long-term investment.