Book Review: The Origin of Financial Crisis: Central Banks, Credit Bubbles and the Efficient Market Fallacy, by: George Cooper, Reviewed by: Ahmed Saied Bamakhramah مراجعة علمية لكتاب: أصل الأزمة المالية: البنوك المركزية - فقاعات الائتمان ومغالطات السوق الفعالة - بقلم: جورج كوبر - مراجعة: أحمد سعيد بامخرمة

How to stimulate the economy by credit creation without causing financial instability is the main thrust of this book. In order to accomplish this goal, the author suggests, contrary to the accepted, albeit conventional, academic paradigm, doing away with the Efficient Market Hypothesis and adopt instead the “Financial Instability Hypothesis” championed by Hyman Minsky. Cooper criticizes applying the concept of “laissez-faire” and the stable equilibrium of goods markets to the labor, land and capital markets, utilizing the same logic and mechanism of attaining stability. As an example of exceptions to the supply-demand paradigm preached by the mainstream economists, he cites conspicuous goods (e.g. fine arts) where demand increases when prices increase, and oil where speculative demand increases when supply gets constrained. Thus, he ushers the case of assets in which, contrary to the conventional free market wisdom, higher prices due to the faltering supply may trigger higher demand.