Getting It Wrong Book Summary - Getting It Wrong Book explained in key points

Getting It Wrong summary

William A. Barnett

Brief summary

Getting It Wrong by William A. Barnett challenges the conventional wisdom on economic policy and offers a new approach to macroeconomic modeling, emphasizing the importance of accurate data and measurement in economic analysis.

Give Feedback
Table of Contents

    Getting It Wrong
    Summary of key ideas

    Understanding the Root Causes of the Financial Crisis

    In Getting It Wrong, William A. Barnett, an esteemed economist, delves into the root causes of the 2008 financial crisis. He begins by challenging the widespread belief that the crisis was the result of greedy bankers, lax regulation, and a failure of mainstream economics. Instead, Barnett argues, the crisis was precipitated by the failure of the economic measurement system.

    Barnett contends that the financial crisis was a result of a series of errors in economic measurement. He points out that the monetary data used by central banks, including the U.S. Federal Reserve, were constructed without reference to economic theory, leading to incorrect assessments of systemic risk. As a result, households, firms, and governments made decisions based on flawed information, leading to increased leverage and risk-taking activities.

    The Role of Economic Measurement

    According to Barnett, the root cause of the financial crisis was the failure to use relevant economics, particularly in the area of economic measurement. He argues that as financial instruments became more complex, the simple-sum monetary aggregation formulas used by central banks became obsolete. Instead, a major increase in public availability of best-practice data was needed. Households, firms, and governments, lacking the requisite information, incorrectly assessed systemic risk and significantly increased their leverage and risk-taking activities.

    Furthermore, Barnett suggests that better financial data could have signaled the misperceptions and prevented the erroneous systemic-risk assessments. He emphasizes the importance of accurate economic measurement in preventing financial crises and calls for a shift towards more accurate and relevant economic data.

    The Role of Regulation and Deregulation

    Barnett also examines the role of regulation in the lead-up to the financial crisis. He argues that when extensive, best-practice information is not available from the central bank, increased regulation can constrain the adverse consequences of ill-informed decisions. However, instead of increased regulation, there was a trend towards deregulation in the financial industry.

    According to Barnett, this deregulation, combined with increasing complexity of financial instruments and inadequate and poor-quality data, created a 'toxic mix' that contributed to the financial crisis. He suggests that more effective regulation, based on accurate economic measurement, could have mitigated the impact of the crisis.

    Concluding Thoughts

    In conclusion, Getting It Wrong presents a thought-provoking analysis of the 2008 financial crisis, challenging the prevailing narrative and attributing the crisis to the failure of economic measurement rather than greed or regulatory failure. Barnett's argument underscores the critical role of accurate economic data and the need for a more informed and measured approach to economic policy and regulation. The book ends with technical appendices containing the mathematical analysis supporting Barnett's arguments, providing a thorough and rigorous exploration of his thesis.

    Give Feedback
    How do we create content on this page?
    More knowledge in less time
    Read or listen
    Read or listen
    Get the key ideas from nonfiction bestsellers in minutes, not hours.
    Find your next read
    Find your next read
    Get book lists curated by experts and personalized recommendations.
    Shortcasts
    Shortcasts New
    We’ve teamed up with podcast creators to bring you key insights from podcasts.

    What is Getting It Wrong about?

    Getting It Wrong by William A. Barnett challenges the conventional wisdom about the causes of the 2008 financial crisis. Barnett argues that the crisis was not solely the result of greed and reckless behavior, but rather a failure of economic measurement and policy. He delves into the complexities of monetary and financial data, and offers a thought-provoking analysis of what went wrong and how we can avoid similar mistakes in the future.

    Getting It Wrong Review

    Getting It Wrong by William A. Barnett (2012) delves deep into economic research methods and the pitfalls of flawed statistical analysis. Here's why this book is worth your time:

    • Offers insightful critiques of common mistakes in economic research, helping readers sharpen their analytical skills and avoid costly errors.
    • Explores the complexities of data analysis and highlights the importance of robust methodologies for accurate economic assessments.
    • With its engaging examples and clear explanations, the book makes the intricate world of economic research accessible and intriguing, ensuring readers stay captivated throughout.

    Who should read Getting It Wrong?

    • Individuals interested in understanding the root causes of the 2008 financial crisis

    • Economists and financial professionals seeking a critical analysis of mainstream economic theories

    • Readers who want to challenge their assumptions about economic data and measurement

    About the Author

    William A. Barnett is a renowned economist who has made significant contributions to the field of monetary economics. He has served as a professor at several prestigious universities and has authored numerous books and articles on topics such as macroeconomic theory, monetary policy, and economic measurement. Barnett's work challenges conventional economic thinking and offers fresh perspectives on how to improve economic analysis and policy. Some of his other notable books include Inside the Economist's Mind and Measuring Business Cycles.

    Categories with Getting It Wrong

    People ❤️ Blinkist 
    Sven O.

    It's highly addictive to get core insights on personally relevant topics without repetition or triviality. Added to that the apps ability to suggest kindred interests opens up a foundation of knowledge.

    Thi Viet Quynh N.

    Great app. Good selection of book summaries you can read or listen to while commuting. Instead of scrolling through your social media news feed, this is a much better way to spend your spare time in my opinion.

    Jonathan A.

    Life changing. The concept of being able to grasp a book's main point in such a short time truly opens multiple opportunities to grow every area of your life at a faster rate.

    Renee D.

    Great app. Addicting. Perfect for wait times, morning coffee, evening before bed. Extremely well written, thorough, easy to use.

    4.7 Stars
    Average ratings on iOS and Google Play
    36 Million
    Downloads on all platforms
    10+ years
    Experience igniting personal growth
    Powerful ideas from top nonfiction

    Try Blinkist to get the key ideas from 7,500+ bestselling nonfiction titles and podcasts. Listen or read in just 15 minutes.

    Get started

    Getting It Wrong FAQs 

    What is the main message of Getting It Wrong?

    The main message of Getting It Wrong is that understanding our mistakes leads to progress and growth.

    How long does it take to read Getting It Wrong?

    The reading time for Getting It Wrong varies, but typically takes a few hours. The Blinkist summary can be read in 15 minutes.

    Is Getting It Wrong a good book? Is it worth reading?

    Getting It Wrong delves into the importance of learning from mistakes, making it a valuable read for personal development.

    Who is the author of Getting It Wrong?

    William A. Barnett is the author of Getting It Wrong.

    What to read after Getting It Wrong?

    If you're wondering what to read next after Getting It Wrong, here are some recommendations we suggest:
    • Basic Economics by Thomas Sowell
    • The Ascent of Money by Niall Ferguson
    • Think and Grow Rich by Napoleon Hill
    • The 4-Hour Workweek by Tim Ferriss
    • Rich Dad, Poor Dad by Robert T. Kiyosaki
    • Secrets of the Millionaire Mind by T. Harv Eker
    • The Richest Man in Babylon by George S. Clason
    • Business Adventures by John Brooks
    • The Most Important Thing by Howard Marks
    • More Money Than God by Sebastian Mallaby