An article in today’s New York Times, “Illusions About Inflation,” by Mark Hulbert is based on the sort of research that gives economists a bad name. The piece references an a academic paper “Inflation Illusions and Stock Prices,” by John Campbell and Tuomo Vuolteenaho, that argues that investors analyze stocks incorrectly during inflationary times because […]
Read more...Go read a very nice article on Nouriel Roubini in the New York Times. It doesn’t go into too much detail about his ideas, it does seek to place him among other economists. My favorable opinion of him went up when I learned that even though he has high level math skills, his academic work […]
Read more...A classic from Tim Knight (click to enlarge):
Read more...I’m talking platform leverage – the sort of leverage you can get in a proxy battle by putting a page like this in front of millions of people, many of whom may in fact own your stock, the week before the meeting, for free: Or, the leverage in media you can get by interjecting a […]
Read more...This comment by Paul De Grauwe in the Financial Times, deserves more discussion that I can provide at this juncture (I am about to do a face plant), but I trust readers will find it a worthy offering. De Grauwe focuses on sacred cows that have been gored in the credit crunch. He has written […]
Read more...Even though Greg Mankiw claims in the New York Times today that ” Economists are nearly unanimous in their support of an unfettered system of world trade,” another Harvard economics professor begs to differ. Dani Rodrik, writing for Project Syndicate, finds that some prominent former staunch advocates of liberalized trade regimes are having serious doubts […]
Read more...This comment in the Guardian by Simon Jenkins is a tad unfair, since it treats economists as having a fair degree of unanimity of thinking. Dean Baker, Nouriel Roubini, and Calculated Risk, among others, point out that there were economists (and market participants) who saw the housing bubble and the credit crunch coming. Jim Hamilton […]
Read more...Nobel Prize winning economist Joseph Stiglitz tells us that neo-liberalism, witch is a catch phrase for policies that favor domestic deregulation and dismantling trade barriers internationally, has failed. The problem that Stiglitz fails to acknowledge is that despite the questionable record of these practices, they still hold considerable sway in the media and in the […]
Read more...Wolfgang Munchau, in his latest Financial Times comment, “Recession is not the worst possible outcome” takes up a theme near and dear to our and many readers hearts: that policies to avoid recessions do more damage in the long run than letting slumps run their course. Munchau is hard on economists, but not the purely […]
Read more...Reader Juan provided a well-argued and provocatively-worded critique of so-called market fundamentalism yesterday that I thought would provide grist for thought and discussion. The main argument in favor of less regulated commerce, both domestically, in the form of deregulation, and internationally, via more liberal trade regimes, is that it generates higher growth. Juan argues that […]
Read more...It’s gratifying when someone takes on a topic I had wanted to address and does a better job than I could have. Various readers have explained how prices are formed in oil markets, most importantly, how for the vast majority of oil sold, prices are specified in long-term supply contracts and the benchmark is not […]
Read more...Although we don’t always agree with his views, we are fans of Thomas Palley posts because he is willing to question economic orthodoxy. We were particularly taken with his piece, “Demythologizing Central Bankers and the Great Moderation.” In his latest offering, Palley disputes the idea that the recent runup in oil prices is entirely the […]
Read more...A comment in the Financial Times, “Our need to sustain the ‘great moderation’,”by Stephen Cecchetti, professor of global finance at Brandeis, set my teeth on edge. I suspect many readers will react the same way. Let’s start: The US housing market has collapsed, placing severe strains on the financial system and, as a direct consequence, […]
Read more...With the financial system on the exam table, it has been more than a bit troubling, that certain questions are neglected in serious academic/policy debates. The discussion of possible remedies focuses on regulatory solutions, everything from requiring mortgage brokers to be licensed to increasing financial institution capital requirements and having much greater harmonisation, as the […]
Read more...The headline summarizes the observations of economist Paul De Grauwe, who takes central banks to task for their reliance on so-called Dynamic Stochastic General Equilibrium models (DSGE). De Grauwe objects to some of the fundamental assumptions embedded in them (consumers are rational and all have the same preferences, any disruptions are the result of external […]
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