Archive

The U.S., in aggregate, acts as a bank to the rest of the world. The precise role of that bank has evolved over the course of the crisis.

Our interviews in the halls of the Mount Washington Hotel, covered the range of opinion about the severity of conflicts of interest in economics: we are alright; economics is no more corrupted than other sciences; corruption is substantial; it is rotten to the core.

The first graph shows US financial flows over the past five years.

The Marshall Lectures often provide thought provoking talks and one talk in particular spoke to me looking at the relationship between history and economics:

In 2006, the Fed asked its macroeconometric model what would happen if house prices dropped by 20%. The model projected the past into the future and said: “Not much.” Well, the financial crisis proved it wrong.

One silence, and one silo

Banks take on excessive risk since they know, in case of failure, the taxpayer will step in to rescue them. That is a form of free insurance, and Ed Kane wants to end it.

Innovation drives economic growth and welfare, and the industrial corporation drives innovation, says William Lazonick. But just how do corporations innovate?

Last June at a History of Social Science workshop , David Engerman presented a paper on the Harvard’s Refugee Interview Project (1950-1954).

On this blog, we like to overstate quite a bit our irreverence towards the establishment and in particular our senior colleagues.

When externalities are present and transaction costs are absent, private parties will strike welfare-enhancing deals regardless of who owns what. In a frictionless world, bargaining leads to efficiency. That is the essence of the Coase Theorem, and it is fiction, according to Steven Medema.

In response to the walkout staged by students in the intro economics class at Harvard, the Institute launched the syllabus project, 30 Ways to Teach Economics.

The physicist Sorin Solomon begins to feel dizzy when the economist Leanne Ussher talks econ lingo. Yet he listens, because the two of them have found a productive area of collaboration: some economic phenomena, they find, can be explained without recourse to the quirks that feed into human decision making.

The Nobel Memorial Prize defines high achievement in economics, and it validates the discipline’s claim for scientific authority. And yet, historically, it can be understood as a reflection of domestic policy conflicts in Sweden.

We all know it: The financial sector is bloated and banks are too big to fail. But just how bloated is it, and how much should it be shrunk?