Robert Waldmann I like to criticize financies, financial regulators and fresh water economists. I should defend something for once. It is easy to criticize. So I ask to what extent has the IS-LM-Phillips curve model been proven false. Also what useful insights can one gain from the IS-LM-Phillips curve model. A long long trip down […]
The WSJ reports on an Obama administration plan to convert US Treasury owned preferred shares to common stock. The plan seems to be an answer to the question “How does one save an insolvent bank without giving a windfall to current shareholders or nationalizing ? “ The government will convert its stake only to the […]
Robert Waldmann In this post, I mentioned something which I have been thinking about. It seems to me that many strategies of financial market participants are based on simultaneously believing that financial markets are efficient and inefficient. If financial markets are efficient, then the way to maximize risk adjusted returns is to buy and hold […]
Robert Waldmann Felix Salmon has a fascinating article on the Gaussian Copula. Obviously I had noticed that financial market participants had made some mistakes in the recent past, but I had no idea how crazy they had been. I’d say that one implication of Salmon’s article is that the invention of the CDS was very […]
Robert Waldmann is still trying to learn journalistic arithmetic. Recently I learned that 500,000 = 0 Now I learn from CNN that I got to restudy fractions or division or something as it seems that “two thirds” is equal to 92% A new national poll indicates that two-thirds of those who watched President Obama’s address […]
Robert Waldmann Michael Kinsley suspects that the US government might decide to inflate its debt away. “Just three or four years of currency erosion at, say, 10 percent a year would slice the real value of our debt — public and private, U.S. bonds and jumbo mortgages — in half.” Notice how “log(2)/log(1.1) = 7.25 […]
Robert Waldmann In my childhood and teens I counted on The Washington Post (motto “All the President’s Men. If you liked the movie, you’ll love the newspaper,” so now I guess I will have to relearn mathematics to adapt to the fact that 500,000 = 0. Via DeLong Via Hilzoy In defense of George Will’s […]
Matthew Yglesias doesn’t share the common view that gerrymandering has caused congress to be more partisan. He notes a recent paper (pdf here) by Princeton’s Nolan McCarty, UCSD’s Keith Poole, and NYU’s Howard Rosenthal and quotes a bit and I quote a bit of that bit Both pundits and scholars have blamed increasing levels of […]
Robert Waldmann Arnold Kling states a widely held view succinctly I see elite Democrats as exploiting “the poor” in order to pursue their own drive for power. People who genuinely care about the poor work with the poor and give their own money to the poor. Liberals mostly just pose about caring for the poor […]
Robert Waldmann My effort immediately below to explain some general equilibrium theory in English didn’t work out so well. Here I will attempt to give simple examples which show how rational individual choice and/or trade between rational consenting adults can make everyone worse off. Models will all involve strange fruit trees, that is assets which […]