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This Science piece on leverage being “the root of all financial turmoil” is interesting (will follow up on it), though a). I doubt leverage is “the” (only) root of the problem; b).
Category: entrepreneurship
Econlinks for 20-01-’08
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I made a mistake last time when I mentioned Gelman and Cai’s recent research on whether the US political parties would gain from shifting their position on the economic axis, focusing on the Kerry vs.
Econlinks for 16-01-’08
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Alessina, Ichino and Karabarbounis arguing for gender based taxation, on VoxEU. This recent CEPR working paper has the details. Their modelling is very basic (one obvious extension to make this more realistic– probably requiring a lot of effort– should be to allow for frictions in the search & matching of agents on the marriage market), but still makes for super interesting research with (potential) serious policy implications.
Econlinks for 27-12-’07
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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.
Econlinks for 21-12-’07
- Larry Summers on the state of the US economy, a 19th of Dec speech (PDF, 8 pages). The gist is that he recommends fast and aggresive monetary and fiscal stimulus (the latter, mainly through tax cuts), just like (but more detailed than) Martin Feldstein, see my previous post on that.