History of the Current Crisis
The European: How did you get into researching choice and decision making? Schwartz: For many years, I have been interested in the hold that the ideology of free market, economics has on people throughout the developed Western world. Why is it that everyone thinks that it’s a miracle of human intervention? Barry Schwartz | Decision-making and Economics - The Paradox of Choice | The European Magazine
Economists have more to learn from the natural sciences if they are to claim a realistic model of human behaviour You’ve come to a canteen for lunch: at one end of the counter, you see juicy fat burgers sizzling on a grill and, at the other end, healthy-looking salads. After a little hesitation, you choose the burger. Nudge thyself
How We Were All Misled by John Lanchester Boomerang: Travels in the New Third World by Michael Lewis Norton, 213 pp., $25.95
John Maynard Keynes, who never tried to conceal that he knew more than most people, also knew the limits to his knowledge. He wrote “about these matters – the prospect of a European war, the price of copper 20 years hence – there is no scientific basis on which to form any calculable probability whatever. We simply do not know.” A wise man knows one thing – the limits of his knowledge
What this transition meant, however, is that jobs and livelihoods on the farm were being destroyed. Because of accelerating productivity, output was increasing faster than demand, and prices fell sharply. It was this, more than anything else, that led to rapidly declining incomes.
John Lanchester · The Art of Financial Disaster · LRB 15 December 2011 No essay in English has a better title than De Quincey’s ‘On Murder Considered as One of the Fine Arts’. I wonder whether, if he were alive today, he might be tempted to go back to the well and write a follow-up, ‘On Financial Disaster Considered as One of the Fine Arts’? The basic material might be less immediately captivating, but there’s a lot to choose from. As Warren Buffett has pointed out more than once, ‘It’s only when the tide goes out that you learn who’s been swimming naked.’ Financial and economic downturns always cause a rash of scandals and exposure. The tide has gone out – it’s still going out – and, frankly, it’s hard to know where to look.
The future: Expect the unexpected
Top economists reveal their graphs of 2011
Book Review: Why Nations Fail Updated March 24, 2012 12:01 a.m. ET Far too much intellectual firepower regarding the global poor these days focuses on the (small) things Westerners can do to help—obsessing about, say, how much money to spend on mosquito-blocking bed nets to fight malaria.
It was the holy grail of investors. The Black-Scholes equation, brainchild of economists Fischer Black and Myron Scholes, provided a rational way to price a financial contract when it still had time to run. It was like buying or selling a bet on a horse, halfway through the race. It opened up a new world of ever more complex investments, blossoming into a gigantic global industry. The mathematical equation that caused the banks to crash | Science | The Observer