December 19, 2009
Caporale, Tony and Kevin B. Grier (2000) Political Regime Change and the Real Interest Rate, Journal of Money, Credit and Banking, 32/3: 320-334.
A number of influential macroeconomic models, from Keynes to the monetarists, assume that real interest rates (i.e. discounted for inflation) change over time and are sensitive to their political environment, other words that they are policy variant. However this assumption has not been empirically tested, should this assumption be in fact contradicted, it would have important repercussions on these models’ viability. Moreover, the policy-variant hypothesis apparently conflicts with Eugene Fama’s conclusion that the mean of the real rate is essentially constant (p.322). The literature has found to match Fama’s views more closely with reality: real interest rates are “essentially constant over long periods of times but subject to infrequent mean shifts that are not related to policy regime changes”. Read the rest of this entry »
November 26, 2009
Coates, John M., Mark Gurnell and Aldo Rustichini (2009) Second-to-fourth digit ratio predicts success among high-frequency financial traders. Proceedings of the National Academy of Science, 106/2: 623-8.
What does traders’ success on the market floor depend on? Earlier studies have shown that one’s level of testosterone did affect one’s daily results. Since “prenatal androgens have organizing effects on the developing brain, increasing its later sensitivity to […] testosterone”, it would make sense that prenatal androgens also have a structural effect on a trader’s results on the long term. Read the rest of this entry »
September 14, 2009
Ben, Olivier and Bob
Disclaimer: Sorry about the delay in completing this post (holidays and tons of work impeded its prompt publication).
Here’s an article by Paul Krugman on the state of economics and the failure of most mainstream economists to imagine the worst-case scenario (i. e., the world financial crisis of 2008 and the Great Recession of our days). Here are some reactions of Krugman on the reception of the piece in the blogosphere. And here’s a great post by Beatrice Chérrier at History of Economics Playground exploring Krugman’s ambiguities on the methodology of macroeconomics.
Now, on to diminishing my credibility. Here are the ads of the TV show I am part of. The feature was recorded in the first semester of 2008. It will run on Saturdays and Tuesdays at 19 h in NatGeo, the National Geographic channel covering from Tijuana to Ushuaia. I have not heard enough reactions to the show to have an statistically significant image of what people think about it (so far partiality prevails) If you live in the Western hemisphere and have the chance to watch it, I’ll be more than glad to hear your comments on my unexpected debut in television.
August 7, 2009
- Robert Lucas, Professor of Economics at the University of Chicago and 1995 Nobel Prize in Economics, wrote a welcome defense of the predictive power of economics-as-it-is, on occasion of The Economist’s recent criticism on the discipline.
- Lord Robert Skidelsky, Keynes’s biographer and Emeritus Professor of Political Economy at the University of Warwick, also argues in defence of economics in spite of the Queen’s interpellation to the discipline. Here you can read it in the Financial Times and here in his personal website.
- An interesting article in the NYT on statistics as a profession that faces growing demand and even better salaries.
- A neat note in The Economist on “The Slide to Protectionism in the Great Depression: Who Succumbed and Why“, an NBER working paper by Barry Eichengreen, Professor of Economics and Political Science in the University of California at Berkeley, and Douglas Irwin, Professor of Arts and Sciences in Dartmouth College.
- An article in The Economist on a new Museum of Handbags and Purses in Amsterdam, with historical evidence of the non-metrosexuality of male purses. Here’s an excerpt:
The very first object on display—the oldest in the collection—proves that man bags are nothing new. It is a 16th-century pouch made of creamy white kid skin. The surface is decorated with rosettes and 18 tiny pockets of the same soft leather. It was probably made for a travelling merchant. At the time men’s clothes did not have pockets, and the bag provided a quickly accessible sorting system for multiple currencies, each pocket reserved for the coins of a particular city.
That’s it for now. I can’t wait to read Ben’s opinion on the WEHC in Utrecht.
July 17, 2009
The meltdown of modern economic theory.
The Economist has published on its last edition three articles on the impact of the crisis on economics as a science. The first article is a general view on the matter, the second has to do with macroeconomic debates and the third on the state of financial economics.
I think that readers will find it interesting to read the reflection of The Economist’s writers on this issue. How is it that economics got into this impasse?
Here are some excerpts that I found interesting in each of the articles.
Read the rest of this entry »