Global Undergraduate Students: Win A Trip To New York City


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Adair Turner: Capital Markets Balkanization Should Not Prevent Regulation

Don’t worry about the balkanisation of global capital markets” – Adair Turner

Fears that bank regulation or capital controls could lead to a “balkanisation” of global capital markets are overstated and should not constrain policy action to address the problems created by volatile short term capital flows and excessive credit creation, says Adair Turner, Senior Fellow at the Institute for New Economic Thinking and former chairman of the United Kingdom Financial Services Authority. Read more

When is a Bubble a Bubble?

Bubbles have become a major focus of discussion in today's financial markets. But very few people actually define what they mean when describing this financial phenomenon.  

In a recent Harvard Business Review blog post, Markus Brunnermeier, an economist at Princeton University and a member of the Institute for New Economic Thinking’s Advisory Board, had a go at it. Brunnermeier defines the leading characteristics of bubbles thusly:

"Bubbles are typically associated with dramatic asset price increases followed by a collapse. Bubbles arise if the price exceeds the asset’s fundamental value." Read more

Institute Scholars Awarded EAEPE-Myrdal Prize

Servaas Storm and C.W. M. Naastepad are members of the Institute for New Economic Thinking's Working Group on the Political Economy of Distribution. Their 2012 study of Macroeconomics Beyond the NAIRU (Cambridge, MA: Harvard University Press) has just won the Myrdal Prize of the European Association for Evolutionary Political Economy.

The Institute is pleased to congratulate them on this outstanding achievement.


EAEPE-Myrdal Prize 2013


Roman Frydman: Modeling a World of Imperfect Knowledge

Does it matter if the Rational Expectations Hypothesis is unrealistic?

Not according to New York University Prof. Roman Frydman, head of the Institute for New Economic Thinking’s research group on Imperfect Knowledge Economics (IKE). Read more

Solomonic Judgment vs. Sophists, Economists and Calculators[1] [2]

Given the choice, would you accept to live in a society where happiness and prosperity is guaranteed for all on the condition that one single person be kept permanently unhappy?  Is the well-being of thousands of people “worth” the sacrifice and suffering of a single innocent child?  Such is the dilemma to which the inhabitants of the utopian city of Omelas are confronted in Ursula Le Guin’s philosophical short-story “The Ones Who Walk Away from Omelas”.  In her parable, most people are ultimately able to come to terms with the atrocity. Read more

LIVE STREAM 12/12: The Fall of the Euro

Our Hansen Moment

The main goal of the macroeconomist is to understand the sources behind business cycles and the behavior of financial markets in the modern economy.

As in any science, economics offers many ways to accomplish its tasks. What sets economics apart, however, is that this year two models that are in sharp contrast with each other in explaining the dynamics of financial assets, and were created by two high-profile economists, were selected to receive the discipline’s highest honor - the Noble Prize in economics. Read more

In which MIT decided to teach micro first so as to make economics more relevant

I've already blogged on how undergraduate education evolved at MIT in the postwar era here and here, but since Mike Konczal and Paul Krugman make the case that, to bring introductory economics closer to the real world, macro should be taught before micro as Samuelson did in the first 13 editions of his Economi Read more