Articles
Articles and analyses from the INET community on the key economic questions of our time.
The Lehman Crisis and the Unfinished Business of Financial Reform
With the collapse of Lehman Brothers in September 2008, a crisis in part driven by derivatives on subprime mortgages, a seemingly obscure sector of the financial market help fuel the worst economic crisis since the Great Depression.
Understanding Bank Liquidity
The shortage of liquidity in the interbank market in China has sparked off a fear of “monetary famine.” This seems rather odd when the national savings rate is 50 per cent of GDP
Should China Deregulate Finance?
Thirteen Ways to Split a Cake*
Axiomatic bargaining is presented in MWG in the context of welfare economics (Ch. 22), the aim being the formulation of reasonable criteria for dividing gains resulting from cooperative endeavors (the “joint surplus”). It is further presented as an application of cooperative game theory, in which an arbitrator distributes the joint surplus in a manner that reflects “fairly” the bargaining strength of the different agents (although we could conceive of a situation where the parties are bargaining without an external party). If bargaining fails, the outcome is the parties’ own fallback positions (the threat point, or status quo).
The rise of economics as engineering I : setting the scene
The rise of the economist as engineer is, economists and historians say, an essential characteristic of the development of economics in the postwar period.
Economics Needs Replication
The recent debate about the reproducibility of the results published by Carmen Reinhart and Kenneth Rogoff offers a showcase for the importance of replication in empirical economics.
Why Raising the Minimum Wage Makes Economic Sense
A minimum wage is a small minnow in an ocean of deficient aggregate demand