Atslēgvārdi:

Fear the Boom and Bust 17

Here is a great economics lesson, which is only seven minutes long (thanks to jb for a pointer)!

Iesaki citiem:

http://www.econstories.tv/home.html

It’s produced by the Mercatus Center at George Mason University. I spent a semester there as a Fulbright Scholar at the Center for Study of Public Choice back in 2007. These are some very free markets guys in case you haven't noticed. Still, they are anything but lightweights and can deliver a solid punch!

Incidentally, Russ Roberts runs another great resource, the Econtalk, which I highly recommend.

This famous quote by Keynes is really timeless:

" Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist…"

Will everybody whose knowledge of economics boils down to "we should stimulate the economy" please stand up?

Iesaki citiem:
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Komentāri (17) secība: augoša / dilstoša

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FDEAFRSGF 12.05.2011 10:26
Wonderbra cuenta es el tama?o de la taza. Las copas del sujetador de apoyo y cubrir los pechos y se miden en las letras como AA, AB y tal. calvin klein para hombre en la parte superior y los lados. También calvin klein relojes hombre grandes si se ven arrugadas o tejido excesivo.

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Smith --> V Dombrovsky 03.02.2010 11:51
your answer to non economist is very interesting. Although being an ardent defender of free-market, you still DON'T KNOW, whether it was good to bail out the banks! ??? it's the core of the free-market approach - people are rational being, and if you have blundered, then it's your own problem and the market will make you SUFFER for your incompetence! If you're saying you don't know, then you shuould just admit your eclectisms and shouldn't construct your image as a free-market economist.

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x to pats 03.02.2010 10:50
var jau lepoties ari, ka dzivo koka un runa viena valoda:) par gaumi jau nestridas:):)

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pats 02.02.2010 20:30
tipiski, var murmulēt visādās valodās, tikai latviešu nevar līdz galam iemācīties.

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non economist -> V Dombrovsky 02.02.2010 12:37
Thanks for your reply and OK, I'll be more careful with the labels. There seems to be a lot of ethical issues here, however, which can't be so easily disassociated from ideological points of view.

One is closely related to the issue of bail outs: it seems a little unfair that a tax payer struggling to pay back a mortgage in these more challenging times will also be paying, via taxation, money to the financial institutions which are being bailed out (a not insignificant amount if the drošības spilvēns tiks izmantots). It seems to be a case of being told "You must pay your debts, and you must help me pay mine."

There is a web of related issues, of course (the rights of savers vs borrowers, the fiduciary duty banks have to shareholders, the notion of the 'real economy' vs finance, and the erosion of democracy in this whole process), but I'll leave them for another post.

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govs from Latvia 31.01.2010 19:28
Long-run costs in case of PAREX are really uncertain, and the bail-out was mastered with a clear view of short-run costs, as now has become apparent. Long-run costs of this bailout are so uncertain, that not the government experts, nor self-proclaimed experts of SSE have even tried to characterise what they even approximately are.

The domain of government-failures unfortunately is attributed with many problems of incomparability with other failures and successes. The advent of Adolph Hitler was evidence of total failure of Bruening-governments, but economically and socially it was an absolute ultima ratio success et nunc et semper et secula seculorum.

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V Dombrovsky -> non economist 31.01.2010 12:48
Good question. In short, I don't know.

But I'd like to point out that the use of labels, e.g. "a free market economist" can be misleading. There are market failures, economists have never denied that - it's textbook stuff. A standard reasoning is that market failures require government interventions. However, the economists were not that quick to catch up one the fact that there are also "government failures". This is what much of the "public choice" school is about. Potentially, government failures may results in more disastrous outcomes that the market failures that the governments seek to address. In the end, it's all about choosing the least evil, i.e. figuring out whether market failures is outweighed by government failure on a case-by-case basis. This requires some really hard work as opposed to simply taking an ideological position, e.g. a "free-market" vs "pro-government".

So is in this example. Yes, markets can malfunction, for various reasons. But when governments start intervening with e.g. bail-outs and the "too-big-to-fail" doctrine, they create perverse incentives for the very same banks they seek to regulate. Maybe, the losses that bail-outs create over the long run far outweigh the benefits of bailing out today. Maybe at this stage the economists are not capable to provide a convincing answer to a tough question like this. I don't know, but my instincts would probably tell me to bail-out (e.g. Parex) because the long-run costs are very uncertain (but potentially very large).

But I'd like to stress that in the end, it's lots of hard work on a case-by-case basis, looking at both the market failures and the government failures and choosing the least evil.

I think Cochrane puts it all very well: http://www.newyorker.com/online/blogs/johncassidy/2010/01/in...

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The Heteredox Economist 29.01.2010 13:36
Yes, lots of fun, but all a bit too simplistic for me liking.

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non economist 29.01.2010 11:16
ahem - there should be no 'imagine that' in the previous post

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non economist 29.01.2010 11:15
Thanks for that: very entertaining. One quick (possibly knee-jerk/possibly not) reaction:

"Just a broke banking sysyem" - well a broken deregulated banking system, which is being bailed out through the EC and IMF via the state in order to imagine that the banks' creditors' demands/rights are observed.

As a free market economist, do you think there should have been no bail out and should be no drosibas spilvens to the banking sector in this
case?

Cheers

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Political Philosopher 28.01.2010 17:21
I believe you left out political philosophers. The full quotation reads as follows: "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back."

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Agent Mulder 28.01.2010 12:58
They ain't no Eminem ;)

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