In chapter 7, Releasing the BIS credit (May 29 - June 5), the BIS credit of 150 million schilling is released to the ANB as a moratorium is averted and a guarantee. Meantime, the issue of an Austrian government loan, re-emerges and it becomes clear that the French may not be able to or wanting to take the lead in organizing the loan. In Basel, the BIS is getting ready for the upcoming board and governors’ meeting, where the decision about another credit to the ANB will have to be discussed. Rodd prepares several notes and a plan for the meeting.

In chapter 3, preparing for crisis, the narrative begins. It is told mainly chronologically and this chapter deals with the period between May 11 and May 19, but only after a brief focus on January 1931 where Harry Siepmann on the basis of the socalled Bagehot model considers what to do in case of a major financial crisis in Europe. The Bagehot model for a lender of last resort and its inadequacy in the face of an international crisis, is a theme that goes through the book’s narrative. On May 11 the Credit Anstalt failure is made known and the central bankers get ready to make sense of the information they get from Austria and elsewhere. The BIS sends Francis Rodd to Vienna and the chapter follows him closely as he communicates his findings back to the BIS and Bank of England. In a world where debt is abundant and credit scarce, Rodd presents a plan to the upcoming BIS board meeting.

In chapter 11, To act now if we are to act at all (June 16 - Jun 27) the relative calm in Austria is followed by increasing concern about Germany which looses foreign exchange. The Bank of England, the New York Fed, the Banque de France and the Bank for International Settlements arranges a $100 million credit to the Reichsbank. Meanwhile,on June 20, US President Herbert Hoover announces his plan for a one year moratorium, which is received positively in most of Europe, but not in France. George Harrison assumes a more active role in trying to defuse the concern about a breakdown in Europe, and he enters into dialogue with the Banque de France, which is more open to a solution than the French government. The chapter ends with some optimism that the Hoover proposal may have changed the situation in Europe.

Chapter 13, Germany will collapse (June 19 - July 10) begins with everyone’s eyes on Germany where the uncertainty about the French position towards the Hoover plan increases every day. More generally, politics comes to play a larger role, as Norman increasingly emphasizes that it’s about politics, and Harrison has to take Hoover’s plan into account. At the same time leadership in the epistemic community of central bankers shifts away from Norman toward Harrison, who enters into a dialogue with French central bankers. Tensions arise between Norman and Harrison, as the begin to subscribe to divergent narratives of the situation and what needs to be done. In Germany, the situation gets more concerning by the hour, and Hans Luther travels to London and Paris in an unsuccessful attempt to secure a giant credit to the Reichsbank.

I discuss my research on vaccination planning. Social interactions in treatment response make infectious disease a core concern of public health policy. Spread of infection creates a negative external effect. Preventive administration of vaccines may reduce disease transmission. In a decentralized healthcare system, infected and at-risk persons may not adequately recognize the social implications of their actions. Hence, there may be a rationale for government to seek to influence treatment of infectious diseases. Policies range from quarantines of infected persons to mandatory vaccination to subsidization of vaccines and drugs. I focus on a prevalent difficulty, being scarcity of evidence about how interventions affect illness. Randomized trials, which have been central to evaluation of treatments for noninfectious diseases, are less informative about treatment of infectious diseases. I develop minimax regret policy based on credible assumptions. I first consider a simple representative-agent setting in which members of a large population share identical cost of vaccination, cost of illness, probability of vaccine effectiveness, and probability of illness when unvaccinated or unsuccessfully vaccinated. I then generalize to vaccination of a heterogeneous population.

Chapter 4, Moratorium or guarantee (May 25 - May 27), traces the communications between central and private bankers as they realize that a moratorium may be on its way. Central and private bankers increasingly try to avoid a moratorium and Norman uses his network to get the international creditors to organize themselves. There is an increasing sense of urgency and uncertainty, but it seems that the BIS and central banks are successful in averting a moratorium and getting a guarantee instead. There are still many unknowns, however, and the occasional conflict in the epistemic community also appears.

After a brief introduction to the outbreak of the Austrian Credit Anstalt crisis in May 1931 and the early response by central bankers from Bank of England, the BIS and the New York Federal Reserve Bank, this chapter proceeds to present the book’s overall issues and main concepts, which will be used as a heuristic framework throughout the narrative. The main concepts of the book are radical uncertainty, sensemaking, narrative emplotment, imagined futures and epistemic communities. In the chapter, I discuss how these concepts are helpful in understanding central bankers’, and other actors’, decision-making and practices in the five month from May through September. The chapter also discusses my analytical strategy and presents the empirical material, which comes from the Bank of England, Bank for International Settlements, the Federal Reserve Bank of New York, the J.P. Morgan Archive, the Rothschild Archive and a few others. At the end of the chapter, I present the structure of the book.

Section 7.1 examines the idealized setting where optimal utilitarian planning is feasible. I quantify the value of covariate information in improving achievable social welfare. Conditioning treatment choice on more refined covariate information cannot lower social welfare in this setting. It increases welfare if covariate refinement has predictive power that affects treatment choice. I also discuss nonutilitarian arguments to disregard certain covariate information when making clinical and criminal justice decisions.

The remainder of the chapter considers planning when uncertainty about treatment response makes optimization infeasible. Section 7.2 distinguishes settings where the planning problem does or does not decompose into a set of separable covariate-specific problems. The former situations are easier to study than the latter. Section 7.3 considers the common medical problem of choice between surveillance and aggressive treatment of patients, with partial knowledge of personalized risk of illness. Section 7.4 extends the analysis to sequential choice of whether to acquire costly covariate information as a prelude to treatment choice. I focus on medical choice to perform a diagnostic test before making the treatment decision.

Chapter 11, Francis Rodd makes sense - and a plot, (June 9 - June 20). In this chapter I change focus to Rodd’s retrospective sensemaking. I quote in full a long note by Rodd written in the aftermath of the loan from Bank of England where he tells his narrative of what happened from the BIS board meeting on June 8 to June 16. Rodd clearly blame the French government, but not the Banque de France. After this, the perspectiev shifts to that of Pierre Quesnay, who tells his view about the British loan and how it came about. The chapter ends by showing how Rodd leaving Vienna.

Section 10.1 calls for work that strengthens the foundations for planning under uncertainty in three ways: communicating uncertainty, specifying planning problems, and enhancing the tractability of decision criteria. Among the many substantive problems that warrant study, Section 10.2 cites the immediate need for improved pandemic planning, whose salience society should appreciate following the recent global experience with COVID-19. Section 10.3 concludes with a personal perspective on an existential societal decision, making public a commentary that I wrote forty years ago but have not circulated until now.

Chapter 10, A world political problem (June 11 - June 16). This chapter recounts the endgame of the Austrian crisis, while instability spreads to Germany. Norman comes to realize that in reality there is not much the central banks can do, since the real issue is "a world political problem" going all the way back to the Versaille Peace Agreement of 1919, the German war reparations and the allied’s war debts. The International Creditors Committee negotiate in Vienna with the Credit Anstalt and the Austrian government and at the very last minute they succeed in getting guarantee for their deposits, while promising to leave them for at least two years. At the same time, on June 16, negotiations with French bankers over the Austrian bond loans fails, and the Bank of England singlehandedly steps in with a bridge credit to the government. Together, the loan and the standstill agreement stops the Austrian crisis, at least for a while.

I mainly discuss revealed preference analysis, which assumes that choice results from maximization of personal welfare. Section 4.1 discusses revealed preference analysis in some generality. Section 4.2 focuses on identification of income-leisure preferences for evaluation of income tax policy. Whereas Sections 4.1 and 4.2 concern behavior in deterministic settings, Section 4.3 considers identification when it is assumed that individuals cope with uncertainty by maximizing expected utility. Going beyond revealed preference analysis, Section 4.4 discusses identification using subjective data in place of or in addition to observations of actual choices.