While the United States is in a positive market state, many investors remain leery. Besides the rear view of the great recession of 2008, the recent malaise in European markets remind U.S. investors of market fragility and the ever-present threat of setbacks.

“It’s understandable that investors are hesitant. They’ve experienced a major recession and a prolonged period of sluggish gains in the U.S. market. Apprehension is natural,” said Roger Koppl, professor of finance at the Martin J. Whitman School of Management at Syracuse University. “Angst aside, right now the U.S. looks pretty good compared to some European Union (EU) markets. Italy has dipped into a second recession and there is evidence that the same is imminent in other EU countries.”

Koppl’s monograph, “From Crisis to Confidence: Macroeconomics After the Crash,” recently published by the Institute of Economic Affairs, dissects the recent Great Recession in the United States and the extended economic slump that followed. He discusses the fragility of world markets and the factors that have led to investor cynicism and fears of a looming crisis. Koppl asserts that what may appear as market failure during the great recession was actually the consequence of failed government policies. He makes a case for moving away from government command and control toward freer exchange.

Though the US market is in an enviable position, comparably, Koppl contends that the post-crash period after the Great Recession weighs on the minds of investors. “This ‘recovery’ was quite unlike typical post-war recession periods after which employment generally recovers within about two years. Since U.S. output peaked in December 2007, growth has been anemic, output remains below potential and unemployment has been persistently high,” shared Koppl. He contends the same has been apparent in many EU countries. “Similarly, repeated stimulatory measures by other governments have not effected a complete recovery. In the UK, for example, government borrowing has led the national debt to double in five years while output is still below potential.”

Koppl’s work was mentioned in a Treasury Select Committee hearing of the British Parliament by MP Steve Baker, who has long followed Koppl's research. The ‘Big Players’ theory Koppl shares in the monograph has also been cited by the Cato Institute in an article that appeared in Globe Asia. Author Steven H. Hanke referenced Koppl’s presentation of “measurements of regime uncertainty in the current crisis and their negative effects on confidence and economic activity.”

This monograph follows Koppl’s earlier work, “Big Players and the Economic Theory of Expectations,” which was awarded the annual best-book prize by the Society for the Development of Austrian Economics. Koppl has authored and co-authored numerous book chapters and research articles in leading scholarly journals. He is a past president of the Society for the Development of Austrian Economics and current editor of Advances in Austrian Economics, associate editor of Review of Behavioral Economics and blogger at ThinkMarkets. In addition to being on faculty at the Whitman School, Roger Koppl is a faculty fellow in Syracuse University’s Forensic and National Security Sciences Institute. He has served on the faculty of the Copenhagen Business School, Auburn University, Fairleigh Dickinson University and Auburn University at Montgomery and has held visiting positions at George Mason University, New York University and Germany’s Max Planck Institute of Economics.

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