Today’s Top Stories
- London Attacker, Born in U.K., Had Criminal Convictions, Was Probed for Extremism (WSJ.com: World News)
- Pro-settlement hardliner Friedman confirmed as US envoy to Israel (BBC News - Home)
- Investing In Soccer (Forbes - Business)
- Eurovision: Russia rejects offer for Julia Samoilova to perform 'via satellite' (BBC News - Home)
- Mexico may 'step away from NAFTA' if deal isn't good (Business and financial news - CNNMoney.com)
- London Attacks Highlight Balancing Act for Big Cities (WSJ.com: World News)
- New GOP bill costs more, but doesn't cover more (Business and financial news - CNNMoney.com)
- MarketWatch First Take: Micron profits from memory price spike, expects party to continue (MarketWatch.com - Top Stories)
- Rolling Back EPA's Clean Car Standards Is Bad For America. Here's Why. (Forbes - Business)
- Republicans delay health vote as rebels defy Trump (Europe homepage)
- Republicans delay health vote as rebels defy Trump (UK Homepage)
Other Blog Headlines
- 5 Filters of the Mass Media Machine (The Big Picture)
- The Natural Rate of Interest: Estimates for the Euro Area (Economist's View)
- A few Comments on February New Home Sales (Calculated Risk)
Category Archives: Philisophy
I have long had an interest in what the financial crisis means for the future of the fields of economics and finance (see Future of Financial Economics and Future of Financial Economics Part Deux). So I was incredibly pleased to come across Krugman’s abbreviated history and thoughtful criticisms of the field of economics in the New York Times Magazine (see How Did Economists Get It So Wrong).
A bit of a teaser:
Krugman follows that introduction with a fascinating, and well-informed, account of the history and development of the field of economics, with a focus on macroeconomics/finance and the longstanding debate between so-called freshwater (Free-Market) economists and saltwater (Keynseyian) economists. Although Krugman and I are in different academic fields (Krugman is an international macro scholar and I am an international business strategy scholar), our conclusions with respect to the future of financial economics are more or less aligned. Krugman suggests:
Krugman’s article is a fairly long (hence its placement in the magazine), but well worth your time to read. So carve out a bit of time, visit the NY Times Magazine website, pour yourself a drink, and enjoy the read.
More on this topic (What's this?)
Xiâ€™s Anti-Corruption Campaign Is Key to Chinaâ€™s Prospects (Gold Stocks Today, 7/3/15)
Oil Investing: This Could Spark the Next Financial Crisis (Jutia Group, 7/12/15)
Is Simple Incompetence The Real Source Of Crises? (Gold Stocks Today, 6/10/15)
Back in March I suggested that an open discussion about the future of financial economics seemed warranted (see Future of Financial Economics). I wrote:
The first assumption that I took issue with was that of complete markets. In fact, as I suggested:
Markets break down largely because humans do not behave as “rational” actors typically assumed in our most celebrated models.
In addition to the view of markets as complete, I took issue with some of the other assumptions underlying the efficient market hypothesis.
I concluded by calling for greater inclusion, and an openness to contributions from behavioral economics and other social science disciplines.
With that as background, I was pleased to come across a fascinating set of articles from this week’s issue of the Economist entitled “Economics: What went Wrong?” This collection of articles asked fundamentally important questions about the future of the field of economics (see Economics: What went Wrong?, Other-worldy Philosophers, and Efficiency and Beyond).
On the field of economics:
On financial economics:
On behavioral economics:
The Economist concludes:
I could not agree more.
However you may feel about the future of financial economics, I encourage you to read the articles in full:
I’ve been tied up with end of year meetings, graduation, and conference travel lately. This has kept me from posting as regularly as I might like. But I did get to see Hillary Clinton speak at NYU’s commencement last week (see Clinton Gives NYU Commencement Speech).
I quite liked Hillary’s speech, but then again, I’m a sucker for idealistic, inspirational graduation messages. Between you and me, I also enjoy the pomp and circumstance, and the pageantry of the day. And as much as we academics like to complain that graduation ceremonies are long, boring, and suck up otherwise productive hours from a day, a good speaker or two can go a long way toward making the experience worthwhile.
A good set of commencement speeches never fail to remind me why I got into the education business in the first place – to learn, to discover, to share, to teach, and to inspire. Needless to say, I came away from the NYU commencement ceremony feeling reinvigorated and reassured about our academic mission (despite the economic challenges).
So now that I’ve had all the inspiration I can take for one week, let’s switch gears to something not quite as uplifting – the impending bankruptcy of GM (see GM Doesn’t See Deal Before Deadline). According to the NY Times:
But we knew that already.
And we wait…