Authors urge economic reforms to avoid future catastrophic shocks to system
Fellows at Rice University’s Baker Institute for Public Policy to present "Oil, Dollars, Debt and Crises: The Global Curse of Black Gold"

The United States and other major economies have not taken adequate measures to address the underlying forces driving the 2007-2008 financial and oil crises; consequently, they have potentially condemned the global economy to future shocks of more catastrophic proportions.

That is the conclusion of authors Mahmoud El-Gamal and Amy Myers Jaffe in their new book, "Oil, Dollars, Debt and Crises: The Global Curse of Black Gold (Cambridge University Press)," which chronicles the causes of the current oil and global financial crisis and shows how America’s growing dependence on oil has created a repeating pattern of banking, currency and fuel crises.

Unlike other books on the current financial crisis that have focused on U.S. indebtedness and American trade and economic policy, "Oil, Dollars, Debt and Crises" argues that a more complex set of factors are at play where transfers of wealth to the Middle East result in a perfect storm of global asset and financial market bubbles, increased unrest, terrorism and geopolitical conflicts and rising costs for energy.

Only by addressing long-term energy policy challenges in the West, meeting economic development challenges in the Middle East, and adopting proper regulation of banking, financial and oil commodity markets can policymakers ameliorate the forces that will continue to cause repeating global economic crises, the authors wrote.

El-Gamal and Jaffe and will give a presentation based on their book Jan. 7 at 4:30 p.m. at the Kelly International Conference Facility in Baker Hall on the Rice University campus, 6100 Main St. For directions, go to http://www.rice.edu/maps/maps.html.

"No major country can afford to free-ride on efforts to resolve the crisis, and short-term profiteering from perpetuating the conflicts -- regardless of the ideological rhetoric employed to justify it -- should be seen by all in the light of its long-term destructive effects of amplifying the global cycles," the authors warn in a final chapter of the book.

They note that the "dearth of solutions" to rising tensions and conflict in the Middle East has intensified geopolitical risk, creating an escalation of violence and instability that is bound to further destabilize both oil prices and the dollar. The turmoil along the Saudi border with Yemen, political succession struggles inside the Saudi royal family, and the brewing conflict between the West, Iran and its Middle East neighbors, among other regional conflicts, stand poised to bring the U.S. and global economy back to the brink of another major crisis, which the authors believe lies just below the surface despite the muted technical fixes offered so far by the Obama administration.

Jaffe is a fellow in energy studies at the Baker Institute and associate director of the Rice Energy Program; El-Gamal is chair of Islamic Economics, Finance, and Management and professor of economics and statistics at Rice University.

A book signing and reception will follow their presentation. Books will be provided for sale, courtesy of Brazos Bookstore.