What do you think?
Rate this book
The Power of Money
Money permeates our everyday lives—it literally makes the economic world go round—and yet confusion and controversy about money abound.
In The Power of Money, economist Paul Sheard distills what money is, how it comes into existence, and how it interacts with the real economy.
Money issues dominate the news, but economic jargon and the complexity of it all can be bamboozling for regular folks. Paul Sheard, a leading economist and former vice chairman of S&P Global, is known for his ability to see the forest and the trees and demystify complex economic phenomena.
With The Power of Money, Sheard empowers readers to become better-informed economic citizens by providing context for some of the biggest questions surrounding money, such as:
• How does money come into existence?
• How is the process of money printing governed, particularly if too much of it causes inflation?
• What is quantitative easing and how does it work?
• Does government debt ever have to be repaid, and is it really a burden on our grandchildren?
• Are financial crises bound to happen sometimes?
• Can the euro, a currency without a government, survive in its current form?
• Are proposed cures for economic inequality worse than the disease?
• What is the future of money—are cryptocurrencies going to upend the money system as we know it?
Financial enthusiasts and non-specialists alike will be surprised by the answers to these questions. The Power of Money provides a comprehensive foundation of knowledge to help you feel better informed and more confident as you follow and engage in economic and financial affairs and policy debates.
In The Power of Money, economist Paul Sheard distills what money is, how it comes into existence, and how it interacts with the real economy.
Money issues dominate the news, but economic jargon and the complexity of it all can be bamboozling for regular folks. Paul Sheard, a leading economist and former vice chairman of S&P Global, is known for his ability to see the forest and the trees and demystify complex economic phenomena.
With The Power of Money, Sheard empowers readers to become better-informed economic citizens by providing context for some of the biggest questions surrounding money, such as:
• How does money come into existence?
• How is the process of money printing governed, particularly if too much of it causes inflation?
• What is quantitative easing and how does it work?
• Does government debt ever have to be repaid, and is it really a burden on our grandchildren?
• Are financial crises bound to happen sometimes?
• Can the euro, a currency without a government, survive in its current form?
• Are proposed cures for economic inequality worse than the disease?
• What is the future of money—are cryptocurrencies going to upend the money system as we know it?
Financial enthusiasts and non-specialists alike will be surprised by the answers to these questions. The Power of Money provides a comprehensive foundation of knowledge to help you feel better informed and more confident as you follow and engage in economic and financial affairs and policy debates.
- GenresEconomicsNonfiction
288 pages, Kindle Edition
Published May 5, 2023
About the author
Paul Sheard
7 books2 followersPaul Sheard, an Australian-American economist, is the former Vice Chairman of S&P Global and a former Senior Fellow and Research Fellow at Harvard Kennedy School. He held chief economist positions at S&P Global, Standard & Poor’s Rating Services, Nomura Securities, and Lehman Brothers. He taught at the Australian National University, Osaka University, and Stanford University, and was a Foreign Visiting Scholar at the Bank of Japan. Sheard has been a member of several World Economic Forum expert councils and was appointed by two prime ministers to serve on advisory committees of the Japanese Government. He was a non-executive director of ORIX Corporation, and he is a member of the advisory board of the Levy Institute of Economics at Bard College and sits on the board of the Foreign Policy Association. He is a member of the Bretton Woods Committee, the Council on Foreign Relations, and the Economic Club of New York. Sheard’s book in Japanese, The Crisis of Main Bank Capitalism, won the Suntory-Gakugei Prize in the Economics–Politics Division. Sheard has a PhD and a Master of Economics from the ANU. In 2019, his alma mater, Monash University, conferred on him an honorary Doctor of Laws. He lives with his wife on Manhattan's Upper West Side.
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 4 of 4 reviews
December 28, 2023
Good primer on the concept of and mechanisms behind money and credit, and substantiates with some relevant recent political economic history. Would recommend to anyone interested in learning more about macroeconomics from the ground up.
September 8, 2023
This was a challenging book. Our traditional notion of banking is that banks take deposits and then use that money to make loans. Core to Sheard’s argument is that’s completely wrong. Instead, banks just make loans because all they need to do is have a liability for the amount (Sheard relies heavily on accounting notions) and then they can transfer the liability as the loan recipient makes purchases. Sheard also upends our notions of government funding— arguing that the US government does not need to worry about its debt amount because as bonds come due, they just refinance it to a new bond. Progressives will likely cheer this. But on the flip side, he applies this to the expense side and says that taxing the rich to pay for programs is therefore wrong as well. Conservatives will cheer that part (or at least, progressives won’t). Throughout it all though, I learned a lot and gained a fuller understanding of our monetary system.
December 26, 2023
Excellent - explains HOW the monetary system works domestically & globally
February 23, 2024
I mostly enjoyed this book. It's central premise is that private banks and (currency-issuing) governments are "joined at the hip" in creating money. The consequences of this partnership are many. For example, fiscal and monetary policy are not as distinct as they are commonly assumed to be; currency-issuing governments are never budget constrained and can always "afford" their policies without needing to tax anyone (particularly the rich); the euro is fundamentally flawed because it is an attempt at monetary union without a fiscal union. All of these consequences I can mostly get behind; but there are some points that the author presents that I find less compelling.
Particularly, the author avers that the über-rich are an economically benign by-product of the market economy's ability to generate prosperity. He agues that since the government does not need taxes to fund its spending, it can fund policies to help the people it wants to help without needing to take money from anyone else. While perhaps technically true, it misses much of the point of complaints about the means by which the über-rich have accumulated their riches. The author does stress that to say that they are economically benign is not to suggest that there might not be social or political problems with so few owning so much. But I think this is a flimsy and useless distinction.
The book does contains some surprising insights adjacent to its central theme. One is the insistence that shareholders do not "own" a company; they own securities issued by the company that confer to the holder certain rights, such as the right to choose who runs the company, that other shareholders do not have. Another is that money does not flow between currencies as is often imagined. Foreign exchange does not create money because it does not change the total amount of either currency involved in an exchange. Instead, the distribution of own owns each currency changes. Similarly, capital does not flow in the sense it is usually portrayed. Most "capital flow" is the changing ownership of capital goods between countries.
Particularly, the author avers that the über-rich are an economically benign by-product of the market economy's ability to generate prosperity. He agues that since the government does not need taxes to fund its spending, it can fund policies to help the people it wants to help without needing to take money from anyone else. While perhaps technically true, it misses much of the point of complaints about the means by which the über-rich have accumulated their riches. The author does stress that to say that they are economically benign is not to suggest that there might not be social or political problems with so few owning so much. But I think this is a flimsy and useless distinction.
The book does contains some surprising insights adjacent to its central theme. One is the insistence that shareholders do not "own" a company; they own securities issued by the company that confer to the holder certain rights, such as the right to choose who runs the company, that other shareholders do not have. Another is that money does not flow between currencies as is often imagined. Foreign exchange does not create money because it does not change the total amount of either currency involved in an exchange. Instead, the distribution of own owns each currency changes. Similarly, capital does not flow in the sense it is usually portrayed. Most "capital flow" is the changing ownership of capital goods between countries.
Displaying 1 - 4 of 4 reviews