An updated look at what Fischer Black's ideas on business cycles and equilibrium mean today 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.

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

BUSINESS CYCLES and EQUILIBRIUM 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. With the newfound popularity of quantitative finance and risk management, the work of Fischer Black has garnered much attention. Even today, Black's Business Cycles and Equilibrium—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. This Updated Edition 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 Fischer Black and the Revolutionary Idea of Finance. 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. Filled with the practical perspectives of one of the most innovative minds in finance, the Updated Edition of Business Cycles and Equilibrium: Contains Fischer's original essays, which reach some interesting conclusions concerning the role of equilibrium in a developed economyWarns about the use and abuse of modelingExplains the risky business of risk in a straightforward and accessible styleIncludes discussions dedicated to "the effects of uncontrolled banking," "the trouble with econometric models," and "the effects of noise on investing"Provides enlightening commentary on Black's life and work at the time Business Cycles and Equilibrium was written Engaging and informative, the Updated Edition of Business Cycles and Equilibrium will give you a better understanding of what's really going on during these uncertain and volatile financial times.