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How to avoid recession in USA: Greg Mankiw’s answer. Gary Becker and Richard Posner advocate a similar perspective (the argument is centered, of course, on the subprime housing mess). Former Fed boss Greenspan already said that one should do absolutely nothing and wait for the bubble to break on its own, just as the people above (e.g. in Mankiw’s words: “Sometimes, bed rest and wait-and-see are the best we can do“), see my previous post on that. This also takes me to a link by Mankiw on ‘bad press for Ben Bernanke “, the new Fed chair; while I think some of that criticism is valid, I’d say there is really no reason to panic and that one should trust the Fed and its chief governor, with handling this. After all, the great Milton Friedman already said Ben Bernanke is a great choice and is expected to do a good job (& remark here: this youtube clip linked above is almost one hour long wisdom from Friedman; no second of that is expendable).
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“Morality matters for economic performance”: A very interesting summary of recent research plus the agenda for further research in the context, by Guido Tabellini, on voxeu.org. Tabellini already presented (part of) this in the 2007 EEA-ESEM conference from Budapest (more precisely, as the EEA Presidential Address, from the 30th of August), for those of you who have also been attending.
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“Lawsuit investment” as the new hype: “Juridica will make investments in ongoing legal claims, mostly in the US, and loans to law firms to finance their costs in pursuing claims.”
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Markets in everything, one more exotic episode from Tyler Cowen’s book, “Discover your inner economist” (read here the previous one). Today about the ‘business of renting wedding guests’:
A report from India tells of a firm that rents out wedding guests, so that the wedding and the party do not look empty. The “guests” will wear either traditional Indian dress or Western clothes, depending on what the customer dictates. They are told to dance and make small talk, and show a knowledge of the marrying couple,without letting on that they are hired. The firm’s owner, a Mr. Syed, told one newspaper: “The breaking up of joint families and lack of affection among relatives also creates a demand for paid guests”. The Best Guests Centre, at Jodhpur in Rajasthan, is looking to expand. To each his own: I would pay some people to stay away from my wedding.
