894 Posts Found

Accounting for the creation of wealth has long challenged humanity’s best minds. For business readers and academics, Beinhocker is a zealous and able guide to the emerging economic paradigm shift he calls the “Complexity Economics revolution.” A fellow of the economic think tank McKinsey Global Institute, he rejects traditional economic theory, based on a physics model of closed systems, in which change is an external … [ Read more ]

Content: Book | Author: Eric Beinhocker | Subject: Economics

n this shrewd piece of intellectual history, former Boston Globe columnist Warsh shows how two contradictory concepts of Adam Smith-the invisible hand and the division of labor (famously, at a pin factory)-took on lives of their own after their 1776 publication in The Wealth of Nations, and then finally converged in the work of late 20th century economist Paul Romer. In the first half of … [ Read more ]

Content: Book | Author: David Warsh | Subjects: Economics, History

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It was the fatal conceit of socialism, in Hayek’s famous phrase, that wise government bureaucrats could guide society to a better future. Substituting red aspirations with green ones does not change the undertaking’s essential nature-or its likelihood of success.

Content: Quotation | Source: The Economist | Subjects: Economics, Government

How market beta can make hurdle rates look artificially low.

Content: Article | Author: Don Durfee | Source: CFO Publishing | Subjects: Economics, Finance

Capitalism is often defined as an economic system where private actors are allowed to own and control the use of property in accord with their own interests, and where the invisible hand of the pricing mechanism coordinates supply and demand in markets in a way that is automatically in the best interests of society. Government, in this perspective, is often described as responsible for peace, … [ Read more ]

Content: Article | Author: Bruce R. Scott | Source: Harvard Business School (HBS) | Subject: Economics

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Twenty years ago, behavioral economics did not exist as a field. Most economists were deeply skeptical–even antagonistic–toward the idea of importing insights from psychology into their field. Today, behavioral economics has become virtually mainstream. It is well represented in prominent journals and top economics departments, and behavioral economists, including several contributors to this volume, have garnered some of the most prestigious awards in the profession.

This … [ Read more ]

Content: Book | Authors: Colin F. Camere, George Lowenstein, Matthew Rabin | Subject: Economics

In a model of utility, a person’s identity describes gains and losses in utility from behaviour that conforms or departs from the norms for particular social categories in particular situations.This concept of utility is a break with traditional economics, where utility functions are not situation-dependent, but fixed.

Identity is useful to economists because it suggests a natural way in which behaviour can vary within a population. … [ Read more ]

Content: Quotation | Authors: George Akerlof, Rachel Kranton | Source: Rotman Magazine | Subjects: Economics, Organizational Behavior

Ed Sim offers this blog post about globalization, referencing some interesting sources and graphics.

Content: Article | Author: Ed Sim | Source: BeyondVC | Subjects: Economics, International

Economic arguments assume the existence of perfectly competitive markets in which consumers and producers behave rationally in order to maximize utility and profits. In a perfect market, goods and services flow openly, there are no transaction costs, entry and exit is free, and producers and consumers possess complete information about the price, physical characteristics, and availability of each commodity.

But the perfect market is an abstraction. … [ Read more ]

Content: Quotation | Source: Ivey Business Journal | Subjects: Economics, Social Responsibility (ESG)

Professor Jerry Green and coauthor Laurence J. Kotlikoff agree with the long-made argument that the deficit and related fiscal measures are basically labeling conventions with no intrinsic meaning. So why, they wonder, aren’t economists getting the message?

Content: Article | Author: Julia Hanna | Source: Harvard Business School (HBS) Working Knowledge | Subject: Economics

The widely used Fed model leads too many analysts, portfolio managers and financial commentators down the wrong road. It often leads investors to believe that by comparing two numbers – earnings yields and bond yields – they can easily determine whether the stock market is mispriced. Even worse, some investors believe that such a simple comparison is the shortcut to abnormal returns.

In the paper “The … [ Read more ]

Content: Article | Author: Javier Estrada | Source: IESE Insight | Subjects: Economics, Finance

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An idiosyncratic economist preaches the innate morality of business.

Content: Article | Author: Andrea Gabor | Source: strategy+business | Subjects: Economics, People

The productivity boom benefits the U.S. more than Europe. Five reports explore why.

Content: Article | Author: Diane Coyle | Source: strategy+business | Subjects: Economics, International – Europe

Economics has tended to become so tautological as to “explain” everything at the cost of abandoning predictive power. At times, economics as a theory threatens to become economics as a faith.

Content: Quotation | Source: Harvard Business Review | Subject: Economics

In the study “What Do Laboratory Experiments Tell Us About the Real World?” University of Chicago professors Steven D. Levitt and John A. List address the challenges of interpreting experimental work in economics by constructing a model to help shed light on experimental results that likely are generalizable. While the basic strategy underlying lab experiments in the physical sciences and economics is similar, the fact … [ Read more ]

Content: Article | Authors: John A. List, Steven D. Levitt | Source: Capital Ideas | Subject: Economics

Two commonplace business assumptions are that lower quality products must attract buyers with lower prices, and that firms enjoy higher profits in a monopoly than in a competitive market. But information is not a commonplace product. So, should information providers with a low-quality product offer price discounts and fear competition? In this paper, Markus Christen and Miklos Sarvary present evidence that prices for reliable information … [ Read more ]

Content: Article | Authors: Markus Christen, Miklos Sarvary | Source: INSEAD Knowledge | Subjects: Economics, Marketing / Sales

When shorter maturity interest rates exceed longer maturity interest rates, the yield curve is called “inverted”. Executives should not sleep easily! The last six U.S. recessions going back to the 1970s have been preceded by a yield curve inversion. It is also noteworthy that the U.S. yield curve does not give many false recession signals. A yield curve inversion is flat out the best single … [ Read more ]

Content: Quotation | Source: Ivey Business Journal | Subject: Economics