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<p>Foreword v</p> <p>Introduction xxi</p> <p>Chapter 1: Banking and Interest Rates in a World Without Money: The Effects of Uncontrolled Banking 1</p> <p>Chapter 2: Active and Passive Monetary Policy in a Neoclassical Model 23</p> <p>Chapter 3: Rational Economic Behavior and the Balance of Payments 43</p> <p>Chapter 4: Uniqueness of the Price Level in Monetary Growth Models with Rational Expectations 65</p> <p>Chapter 5: Purchasing Power Parity in an Equilibrium Model 81</p> <p>Chapter 6: Ups and Downs in Human Capital and Business 85</p> <p>Chapter 7: How Passive Monetary Policy Might Work 91</p> <p>Chapter 8: What a Non-Monetarist Thinks 99</p> <p>Chapter 9: Global Monetarism in a World of National Currencies 107</p> <p>Chapter 10: The ABCs of Business Cycles 117</p> <p>Chapter 11: A Gold Standard with Double Feedback and Near Zero Reserves 129</p> <p>Chapter 12: The Trouble with Econometric Models 135</p> <p>Chapter 13: General Equilibrium and Business Cycles 153</p> <p>Chapter 14: Noise 169</p> <p>Index 191</p>

<p><b>FISCHER BLACK</b> is regarded as one of the great innovators of modern finance theory. He is most famous for cofounding the legendary Black-Scholes equation, although he contributed much more to finance in the areas of portfolio insurance, commodity futures pricing, bond swaps, interest rate futures, and global asset allocation models. Black worked at the University of Chicago and the MIT Sloan School of Management, as well as Goldman Sachs. He received his PhD in applied mathematics from Harvard University. Black died in 1995, two years before the Nobel Prize was awarded to Myron Scholes and Robert C. Merton for their work on option pricing. Since the Nobel Prize is not given posthumously, Black was given a prominent mention for the key role he played in developing the equation.

<p><b>BUSINESS CYCLES and EQUILIBRIUM</b> <p>Throughout his career, Fischer Black described a view of business fluctuations based on the idea that a well-developed economy will be continually in equilibrium. In the essays that constitute this book, which is one of only two books Black ever wrote, he explores this idea thoroughly and reaches some surprising conclusions. <p>With the newfound popularity of quantitative finance and risk management, the work of Fischer Black has garnered much attention. Even today, Black's <i>Business Cycles and Equilibrium</i>—which lays out his theory that economic and financial markets are in a continual equilibrium—still challenges our thinking, especially during our current economic crisis. <p>This <i>Updated Edition</i> clearly presents Black's classic theory on business cycles and the concept of equilibrium, and contains a new Foreword by the person who knows Black best: Perry Mehrling, author of <i>Fischer Black and the Revolutionary Idea of Finance.</i> Mehrling places Black's book in the context of his own intellectual trajectory, shows how to read it as a challenge to the macroeconomic orthodoxy of his day, and suggests how Black might have used his theory to make sense of today's financial and economic meltdown. <p>Filled with the practical perspectives of one of the most innovative minds in finance, the <i>Updated Edition</i> of <i>Business Cycles and Equilibrium:</i> <ul> <li>Contains Fischer's original essays, which reach some interesting conclusions concerning the role of equilibrium in a developed economy</li> <li>Warns about the use and abuse of modeling</li> <li>Explains the risky business of risk in a straightforward and accessible style</li> <li>Includes discussions dedicated to "the effects of uncontrolled banking," "the trouble with econometric models," and "the effects of noise on investing"</li> <li>Provides enlightening commentary on Black's life and work at the time <i>Business Cycles and Equilibrium</i> was written</li> </ul> <p>Engaging and informative, the <i>Updated Edition</i> of <i>Business Cycles and Equilibrium</i> will give you a better understanding of what's really going on during these uncertain and volatile financial times.

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