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Category Archives: Economics
Human Capital Vignette
Link to .pdf version PEOPLE: Gary Becker, T.W. Schultz, Jacob Mincer, and many others RELATED: Economics of the Family; Household Production DATES: Gary Becker published Human Capital in 1964 CHICAGO: Gary Becker earned his PhD from Chicago in 1955. After teaching at … Continue reading
Posted in Economics, Vignettes
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Milton Friedman’s Scientific Legacy
I wrote the following for the celebration of Friedman’s centenary by the Becker Friedman Institute in November 2012. By any measure, Milton Friedman has had a tremendous impact on our world. Friedman is one of the most recognizable economists of … Continue reading
Graceful Failure and JPMorgan’s Loss
The biggest challenge facing regulators and politicians following the financial crisis is to engineer a regime that allows graceful failure for systemically important financial firms. Failure is, ironically, one of the great strengths of a market-based economy – the creative … Continue reading
Personal Income and Consumption
Summary I have argued for some time that a robust recovery will occur after households adjust spending downwards. The “savings rate” in the U.S. has risen since the financial crisis, but this reflects changes in taxes, not changes in household … Continue reading
Posted in Economics, Musings
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Risk, Black Swans, and Brown Turkeys
The mathematics of volatility and VaR alone are just not enough for understanding risk in today’s environment. We are living in extraordinary times – probably the most extraordinary in three generations. (Don’t get me wrong – I’m not arguing that … Continue reading
Posted in Economics, Musings
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Employment and Unemployment Flows
This is the summary of a 45-page paper (.pdf) available for download at SSRN SUMMARY Unemployment in the U.S. has risen dramatically since the start of the recession in December 2007, going from about 6.8 million people in May 2007 … Continue reading
Household Debt and Spending
My fear is that the current recovery is storing up problems for the future. Household debt continues to decline, and the savings rate has increased. This should be good news for the recovery of the economy: much of the recent … Continue reading
Posted in Economics, Musings
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Inflation Background and Current Situation
As Milton Friedman said, “Inflation is always and everywhere a monetary phenomenon.” Bernanke in his textbook says “The existence of a close link between the price level and the money supply in an economy is one of the oldest and … Continue reading
Thoughts on the Current Macroeconomic Environment
The current macroeconomic environment may appear complicated but is much simplified by focusing on two issues: First, the recent speculative boom and bust and the consequences following there from; Second the increases in spending (fall in “savings rate”) over recent … Continue reading
Posted in Economics, Musings
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A Dynamic Model of Labor Supply Under Uncertainty 1985
This paper lays out the model as in the 1981 paper but also discusses estimation and identification in some detail. Simplifies to a stationary environment with a single wage and then fits gross flow data. Includes empirical results showing interesting … Continue reading