Macroeconomics

Business & Money

Miller, Norman C.

Economics

Houghton, Mifflin Co.

Economic Myths and Magic: Debunking the Illusions of Conventional Economic Thinking

Edward Elgar Publishing

'In this impressive work, Norman Miller tackles a central - perhaps the central - puzzle in international finance: why it is that changes in exchange rates do not equalize returns across borders. In this comprehensive treatment, Miller surveys and synthesizes the recent empirical literature to develop a new interpretation of exchange rate behavior, incorporating a central role for the carry trade. All serious researchers in the field need to read this important book.' - Menzie Chinn, University of Wisconsin, US
'This excellent book develops carefully all of the research on uncovered interest parity, the puzzles that arise from its poor empirical performance, and other puzzling features of exchange rate behaviour of the last 30-40 years. It also develops several fresh ideas on how to model exchange rates with a simple intertemporal model, which I find very appealing. The book will appeal to academics and graduate students working in international macroeconomics and finance, market participants, policy makers and their staff.' - Lucio Sarno, City University London
The Uncovered Interest Parity (UIP) puzzle has remained a moot point since it first circulated economic discourse in 1984. Despite a number of attempts at a solution, the UIP puzzle and other anomalies in exchange rate economics continue to perplex economic thought in international finance. This fundamental book fills gaps in the scholarly literature, suggesting new explanations for the many exchange rate anomalies.
Exchange Rate Economics amalgamates key discourse, generating synthesis models that appear consistent with the UIP puzzle and related anomalies, uniquely bringing them together in one place. A thorough, current review of the literature is presented to provide an extensive analysis of exchange rate aberrations, which contributes numerous new explanations for these puzzling facts. Norman C. Miller probes into the perplexities of international finance and offers an alternative approach toward the UIP puzzle, invigorating and guiding future research.
This timely book will be a useful tool for undergraduate and postgraduate students looking to acquire state of the art knowledge into exchange rate economics and international finance. Scholars and practitioners with an interest in the UIP puzzle and similar anomalies will find this book thought provoking and informative for further inquiry.
Content: 1. Major Puzzles and Anomalies 2. Attempts to Solve Major Puzzles 3. The Intertemporal Approach to UIP 4. Key Features of the Synthesis Models 5. Synthesis Model I 6. Synthesis Model II 7. More Puzzles and Solutions 8. A UIP Framework with Regressive Expectations 9. Summary and Future Work Index

Exchange Rate Economics: The Uncovered Interest Parity Puzzle and Other Anomalies

This insightful and comprehensive book uses theory and empirical studies to debunk contemporary illusions about the functionality of economies and examines the phenomena of economic magic and economic black magic. Norman C. Miller considers 11 economic myths, three of which are the theory that excessive imports reduce employment as firms are forced to downsize or shut down, that a more equal distribution of income kills incentives and reduces economic growth rates and the myth that a higher minimum wage always generates a net decrease in employment. Chapters examine the effects of advances in technology, poverty and income inequality, international trade, and trade deficits on employment and economic growth. The book concludes with discussions on three case studies demonstrating economic black magic, namely the Great Depression, the Great Recession, and the COVID-19 pandemic. This creative and accessible book will be vital reading for students and scholars in economics and finance, the history of economic thought, methodology of economics, and political economy. It will also be beneficial for business owners, economists, finance practitioners, and social scientists, as well as citizens interested in the functioning of economies.

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Books by Miller, Norman C.