Economic (and financial crisis) links

[erudito]

Amartya Sen arguing that what is needed is more attention to overlooked ideas from Smith and Pigou.

Let us consider the possibility that a Harvard MBA has negative value.

Paper on how the bond market failed to anticipate WWI.

Newspapers have plenty of (internet) readers: just not enough ways to turn that into revenue.

A post which is a short

Comments

Not only

[erudito]

I would not claim the foreclosure crisis was only caused by regulatory encouragement to give mortgages to people who who couldn't repay them. I would argue it made it worse (likely much worse), but there would have been some simply from the housing bubbles eventually bursting.

Of course, the housing bubbles themselves derived from regulatory restrictions. But I just want to make it clear that I do not go for a unicausal explanation. After all, such regulatory encouragement hardly forced banks and other financial corporations to get quite so weird and wonderful in their securitisation and derivatives. Or to leverage on the basis of the market always rising. Or to believe that their computer models told them how the world was.

Having said that, funding increasing demand in a fundamentally supply-constrained market is, how do we say this politely?, the triumph of politics over good policy. Also known as an outrageous abuse of the taxing power.

And yes, regarding encouraging people to go into debt is definitely not a function of government: agree all the way bruvver.