Like all of us, though few so visibly, Alan Greenspan was forced by the financial crisis of 2008 to question some fundamental assumptions about risk management and economic forecasting. No one with any meaningful role in economic decision making in the world saw beforehand the storm for what it was. How had our models so utterly failed us?
To answer this question, Alan Greenspan embarked on a rigorous and far-reaching multiyear examination of how "Homo economicus" predicts the economic future, and how it can predict it better. Economic risk is a fact of life in every realm, from home to business to government at all levels. Whether we're conscious of it or not, we make wagers on the future virtually every day, one way or another. Very often, however, we're steering by out-of-date maps, when we're not driven by factors entirely beyond our conscious control.
"The Map and the Territory" is nothing less than an effort to update our forecasting conceptual grid using twenty-first-century technologies. It integrates the history of economic prediction, the new work of behavioral economists, and the fruits of the author's own remarkable career to offer a thrillingly lucid and empirically based grounding in what we can know about economic forecasting and what we can't. The book explores how culture is and isn't destiny and probes what we can predict about the world's biggest looming challenges, from debt and the reform of the welfare state to our competition with China to natural disasters in an age of global warming.
No map is the territory, but Greenspan's approach, grounded in his trademark rigor, wisdom, and unprecedented context, ensures that this particular map will assist in safe journeys down many different roads, traveled by individuals, businesses, and the state.
Alan Greenspan was born in 1926 and reared in the Washington Heights neighborhood of New York City. After studying the clarinet at Juilliard and working as a professional musician, he earned his B.A., M.A., and Ph.D. in economics from New York University. From 1974 to 1977, he served as chair of the Council of Economic Advisers under President Ford. In 1987, President Reagan appointed him chairman of the Federal Reserve Board, a position he held until his retirement in 2006. He is the author of The New York Times bestsellers The Age of Turbulence, The Map and the Territory. and Capitalism in America.
Larry Summers, Financial Times "No other American economic policy maker in the past half-century could have written so thoughtfully about the implications of the Enlightenment for economic policy or have attempted, as Greenspan did while in office and does again here, to compute the physical weight of all the goods that comprise American gross domestic product. The range of topics and arguments makes this book a very important statement, whether one ultimately agrees or disagrees with the author.....Greenspan's range, vision and boldness is especially important at a time like the present, when Washington is preoccupied with the political and petty....Greenspan has written a major work ....[A] splendid book." Burton Malkiel, The Wall Street Journal "The Map and the Territory is a model of expositional clarity, with complex and recondite matters made accessible to the lay reader. The book should be must reading for anyone interested in the way our financial markets work--and sometimes fail to do so." Forbes "Compelling and hugely enlightening...This exposition of a lifetime as a practicing economist is full of insights and lessons for financiers, security analysts, business students and public policy makers, especially Presidents, congressmen, central bankers and the FDIC, SEC, CFTC, FHLB. It should be required reading for some of the insights into the way markets perform." N. Gregory Mankiw, The New York Times Book Review "The book offers much wisdom....[Greenspan] sees the world through a different set of eyes than do many others in his field. He is driven less by theory, more by data and practical experience....Greenspan's new book lays out his worldview in light of the financial crisis, the deep recession and the meager recovery of the past five years. His critics often condemn him as an ideologue, but the book demonstrates the unfairness of that accusation. On a wide range of topics--from monetary, fiscal and financial policy to productivity, inequality and globalization--he offers readers a thoughtful, nuanced and open-minded perspective, tempered by many years of having seen both business and public policy from the inside....Whether or not you're an economist, you can't help coming away from The Map and the Territory with greater insight into many of the crucial issues facing the nation. Greenspan's path to fame may have been unconventional, but after reading this book, you'll understand why five American presidents turned to him and made him one of the great economic policy makers of our time."