The Road To Recovery

by Andrew Smithers

Renowned economist Andrew Smithers offers prescriptive advice and economic theory on avoiding the next financial crisis.

In The Road to Recovery, Andrew Smithers—one of a handful of respected economists to have accurately predicted the most recent global financial crisis—argues that the neoclassical consensus governing global economic decision-making must be revised in order to avoid the next financial collapse. He argues that the current low interest rates and budget deficits have prevented the recession becoming a depression but that those policies cannot be continuously repeated and a new consensus for action must be found. He offers practical guidance on reducing government, household, and business debt; changing the economic incentives for the management class that currently inhibit long-term growth; and rebalancing national economies both internally and externally. Further, he explains how central bankers must broaden the economic theories that guide their decisions to include the major factors of debt and asset prices.

  • Offers practical, real-world economic policies for restructuring and rebalancing the global economic system
  • Presents a modern economic theory for preventing the next collapse
  • Ideal for economists, investors, fund managers, and central bankers
  • Written by an economist described by the legendary Barton Biggs as “one of the five best, most dispassionate, erudite analysts in the world”

As the global economy continues the long climb out of recession, it’s imperative that central bankers and other economic decision-makers not repeat the mistakes of the past. The Road to Recovery offers prescriptive guidance on redesigning an economic system that is healthy, stable, and beneficial to all.

This remarkable work deserves the widest possible audience. I cannot recall a text so full of astonishing evidence, sharp insights and unconventional arguments. Smithers quotes Cassandra as a kind of role model. She has ‘the three typical attributes of a sound analyst: Her forecasts were correct; she made no claim about their timing and her views were invariably ignored.’ The last condition must be avoided at all costs.

Jonathan Steingberg
Walter H. Annenberg Professor of Modern European History, University of Pennsylvania, Philadelphia

With Western economies continuing at best to move sideways in the aftermath of the ‘Great Recession’, despite conventional fiscal and unconventional monetary policies, in his new book Andrew Smithers identifies the missing ingredients to economic recovery. To do so he draws impressively, in his scholarly yet entertaining style, on both economic theory and historical data lambasting policy makers for their reliance on defunct theory. A must-read, offering an illuminated insight into current economic debates.

James Mitchell
Professor of Economic Modelling and Forecasting, Warwick Business School, University of Warwick

Andrew Smithers’s latest book is tough, argumentative, entertaining and deep. It is all that you would expect from someone with his long track record of incisive thought, iconoclastism, and – as Martin Wolf’s foreword reminds us – simply being right most of the time. The core of this book is the argument that the way we pay managers in the USA and UK is drastically distorting the economy, and that this will be a major impediment to sustainable recovery.

Stephen Wright
Professor of Economics,
Birkbeck College, University of London