Category Finance
Medieval Monetary Thought
In my final class lecture this week on ancient and medieval economic thought, I discussed the work of Nicholas Oresme (1320 to 1382), a French Roman Catholic bishop who was also a philosopher, mathematician and an economic thinker. I found it interesting to see a career link between mathematics and economics so early on. More […]
The world wants more US government debt. The US Treasury should supply it.
This fascinating story came out during the psychodrama of the US debt ceiling: U.S. Treasury debt prices soared on Friday on fears a U.S. default could trigger a shortage of Treasuries and even push the world's largest economy back into recession. On the face of it, this makes no sense. The market's reaction to a […]
Bike banks
Bear with me on this one. I'm trying to get my head straight on money and banking, by thinking weird thoughts. Suppose, just suppose, that (for some unknown reason) the only asset that banks liked owning was bicycles. They refused to own any other sort of asset, except, of course, central bank currency and reserves […]
Can demographics explain why the income shares of high earners have increased?
The increasing concentration of incomes among a small number of high earners has been documented at length here ([1], [2], [3]) and elsewhere. Any sensible response to this development has to be based on at least a partial understanding of how and why this trend began – and we still don't have a theory that […]
Fences, Walls, Pillars and Banking
A government report out of the United Kingdom recommended that UK banks should “ring-fence” their retail banking divisions to protect them from riskier investment banking arms. The Independent Commission on Banking (ICB) calls for these changes to be implemented starting in 2019.
Ponzi and pensions
This post was written by Simon van Norden of HEC-Montréal. Since the Republican candidates’ debate, the debate about public pensions has heated up, partly because one of the front runners claims that US Social Security is a “Ponzi Scheme.” Now, that’s a clever choice of words, because most associate “Ponzi Scheme” with a fraud ( […]
The overlooked failure in pension markets
Public economics textbooks have lists of reasons why pension markets fail. People aren't aware of the need for for retirement savings, either because they're short sighted, or have limited cognitive abilities. Annuities markets fail, because only people who know they are likely will live a long time will choose to purchase annuities. Private markets may […]
2 into 17 won’t go
Hans-Olaf Henkel (H/T Larry Willmore) suggests splitting the Eurozone seventeen into two. He wants Germany, Austria, Finland, and the Netherlands to leave the Euro and create their own new common currency. The remaining countries would keep the Euro. I don't think this would work. (But I agree a lot with the other things he says). […]
The Eurozone Tea Party and the Lender of Last Resort
The Tea Party is much more powerful in Europe than in the US. Read Ambrose Evans-Pritchard to see an example. It's just they don't call it the "Tea Party" in Europe. It doesn't seem to have a name over there, but that's what it is.
Gold Prices Bubbling Away
Well, I normally do not follow the price of gold or other precious metals but an email from a former student of mind has piqued my curiousity. My former student is studying medicine rather than economics but has a consuming interest in economics and markets and forwarded me a newsletter on the price of gold […]
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