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Economics is very theoretically comfortable with what may be termed `Keynesian’ waste.

The Risk Society

In a previous post we queried whether the theory of the consumer as developed in the first three chapters of Mas-Colell, Whinston and Green (and indeed other comparable texts) provides anything by way of content beyond what is implied by the abstract description of consumers as agents who are maximizing something. [We did not discuss chapter four, on aggregation of demand, to which we may return later]. As we noted then, a comparable point can be made about the theory of the firm.

For one more time traveling closer to home – Mainz! It’s been the annual meeting of the German Society of the History of Science (the kind of academic club one has to be nominated for membership).

For nineteenthth century figures such as Bentham and Jevons, the concept of utility was associated with satisfaction or pleasure experienced.

So, my new students’ training is essentially about understanding urban “territories” and “societies” through fieldwork. And my contribution is, supposedly, to highlight the economic dimension of all this.

When they told me I was expected to teach “Introduction à l’économie” this year, I thought, OK, this is straight. Every economist knows how to do that.

The Eurocrisis has many dimensions—bank solvency crisis, sovereign debt crisis, political unity crisis, and economic/unemployment crisis—but time after time it has been the liquidity crisis dimension driving events, and ECB response to the liquidity crisis driving institutional evolution. The reason is simple. Liquidity kills you quick.

Mathematics and the ‘Whiz Kids’

Two Nobel laureates, an election, and a shaky economy. The message? We can do a whole lot better.

China released quarterly GDP figures this week. Wen Jiabao emphasized the parts of the release that pointed toward stabilization, and one can certainly find some logic to that view.

MWG introduces the theory of consumer behavior by presenting two distinct approaches to modeling consumer behavior, the preference-based approach (based upon unobservable preferences generating a utility function) and the choice-based approach (based upon observable choice behavior), and attempting to establish connections between the two.

What makes a good model?

In this post, I would like to explore the views of preferences and behavior outlined in MWG Ch.1, and specifically the view of rationality developed in this first chapter.

Everyone wants to ring-fence something, but they can’t agree on what: Vickers, Liikanen, Volcker.