The Fear Factor

Introduction - PART I: THE NATURE OF RISK - The Biology and Psychology of Fear - An Economic Definition of Fear and Risk - PART II: THE SUPPLY AND DEMAND OF LOANABLE FUNDS - The Demand Side - The Supply Side - Balance of Capital - PART III: MEASUREMENT OF RISK - The Risk Premium - How Risk Affects Expected Returns - The Fear Premium - The Demographics of Risk and Fear - The Microeconomics of Risk Aversion - PART IV: THE PROBLEMS WITH RISK - Moral Hazard - Privatized Gains and Socialized Losses - Adverse Selection and Imperfect Information - Risk, Uncertainty, Fear, and Gambling - PART V: RISK AND THE MARKET - Market Volatility and Returns - Fear, Panic, and Market Returns - The Fear Factor - PART VI: A HISTORY OF PANICS - A Brief History of the Fear Gripped Market - The Roaring Twenties and the Great Crash - The Depression-Gripped Economy - Along Comes Keynes - PART VII: COORDINATION FAILURES - The Market for Lemmings, or Tale of Two Cultures - The Role of Machines and ProgrammedTrading - The Ratings Agencies - More Perfect Information? - PART VIII: SOCIAL RESPONSIBILITY AS AN ANTIDOTE TO FEAR - Where Were the Regulators - Ethics and Social Responsibility - Wall Street, Main Street, and the Social Contract - PART IX: INSTITUTIONS THE AMELIORATE OR AMPLIFY FEAR - The Media as an Antidote to Fear - Politics That Fan the Flames of Fear - Is There More to Fear than Fear Itself? - PART X: SOLUTIONS AND CONCLUSIONS - Economic Leadership as an Antidote to Fear - A Dozen Prescriptions to Take Back the Markets - Conclusions - Glossary - Index - Endnotes

COLIN READ is Professor of Economics and Finance at SUNY College at Plattsburgh, and a columnist for the Plattsburgh New York Press Republican newspaper. He has taught economics and finance for 25 years. His recent books include Global Financial Meltdown: How We Can Avoid the Next Economic Crisis and International Taxation Handbook (edited with G. Gregoriou). He has written dozens of papers on market failure, volatility, and housing markets, writes a monthly column in a business trade journal, and appears monthly on a local PBS television show to discuss the regional and national economy.