How Minsky got it right – his financial instability hypothesis and its relevance today.
In mathematics, risk and uncertainty are different things. Models to predict asset prices treat the uncertainty of investment decisions as if they were quantifiable risks, and hence these models keep making disastrous predictions.
Decisions to invest in different businesses and sectors shape our society for generations to come. How are these decisions made, and how effective are financial markets at channelling credit to those sectors that create the best future for us all?
A summary of Lazonick’s work showing how corporate buybacks of shares have artificially inflated share prices, thereby boosting executive pay, while depriving the real economy of funds for investment in productivity.
A detailed look at what QE is, how it worked, and how it has inflated share prices without helping the economy.
How rising wealth inequality, leading to dramatic growth in institutional cash pools, has led to an unbalanced and unstable economy.
What is “repo” and what is its connection to the rise in wealth inequality and economic instability?
This is the first anniversary of the blog, and as it happens I’ve just finished 3 months of posts on one subject and am about…
An explanation of the “Efficient Market Hypothesis” – the belief that markets will always price financial assets correctly.
How everything in the blog so far explains the fall in productivity in recent years.