Political map of London is like America: strong geographic segregation
Thomas Schelling is a brilliant American polymath, who deservedly won the Nobel Prize in economics in 2005. One of his most remarkable insights is about segregation in cities, which he published as long ago as 1971. The residential pattern of American cities tends to be pretty sharply divided on ethnic grounds. The population of many […]
Why do films flop?
The Disney sci-fi flick John Carter has become one of the biggest flops in movie history. The studio has announced that the film’s theatrical run will lose $200million. There has been a huge amount of comment in the media about why this happened. On Yahoo!, for example, several reasons were put forward. For example:the advertising […]
Corporate structure, Darwinism and Random Selection
The corporate world exhibits a wide variety of structures. Co-operatives and partnerships have been around for a long time and have some well known examples. The Co-op, for example, was founded in Rochdale as long ago as 1844 and now is represented worldwide. Goldman Sachs was a partnership for most of its existence. There are […]
Co-operation and Competition
Ed Mayo, ex-head of the New Economics Foundation and now of Co-ops UK, has an interesting blog (here) on the importance of co-operation in our economic system rather than competition. This is a really challenging and difficult topic. Co-operation is extremely important to the successful functioning of the market-oriented economies of the West. But this […]
Minsky Mania: a Raincheck
The American economist Hyman Minsky is currently very fashionable, especially amongst those who are sympathetic to the idea of more government intervention in the economy. Minsky argued that financial crises were an inevitable feature of capitalism, unless governments stepped in through regulation and central bank action. He hypothesised that in prosperous times, when the corporate […]
Why are markets so volatile?
Mainstream economic thinking has considerable difficulty in explaining the massive degree of volatility of financial markets over the past few months.Both shares and bonds exhibit large fluctuations on an almost daily basis. The problem is particularly acute for the concept which is fundamental to a great deal of modern macroeconomics, based on the so-called ‘representative […]
Expansionary fiscal contraction
To many people, this phrase is an oxymoron. How can fiscal contraction be expansionary? But the evidence suggests that this is exactly what has been happening in the United States. In terms of national output, GDP, the trough of the trough of the recession was reached in the second quarter of 2009 (2009Q2). We have […]
Why is economic growth stalling? May be it is Ricardian equivalence!
The British and American recoveries do seem to be stalling. The recovery profile is by no means as strong as is usually the case after recessions, even after pretty major financial crises like that of 2008/09. One of the insights of complex systems is that the impact of any particular factor may differ dramatically according […]
Hard problems in economics
This is a summary of a presentation I gave in Zurich earlier in June to FuturICT,one ofthe candidate flagship European Union research projects, each worth 1 billion Euros. 1.Financial markets is a very hard problem, issues of agent heterogeneity, networks, learning, financial innovation, regulation – all these and more are important. Mainstream economics has largely […]
What a good job Keynes didn’t believe in forecasting
Keynes is in many people’s minds at the moment, as uncertainty about the course of the economic recovery is high. In May 1933, at roughly the same stage in the cycle as we are today, Keynes wrote in the Times: ‘Confidence has been restored and cheap money established both on long and on short term […]
