Imperfect Knowledge
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Trust and Finance
Oct 24, 2013
Finance is built on trust. It is based on promises about tomorrow, often paper promises backed by nothing other than words on a page. When trust in those promises breaks down, so too does the financial system. That is the lesson of thousands of years of history.
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What is Economic Success?
Oct 11, 2013
“You are now leaving the world as you know it.”
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Five Years on from Lehman: The More Things Change, the More They Stay the Same
Sep 22, 2013
Sadly, it is questionable whether the economy has really improved.
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Lehman Was Not Alone – Measuring System Risk in the 2008 Crisis
Sep 21, 2013
what would measures of systematic risk have indicated to Treasury Secretary Paulsen if they had been available at that time?
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The Failure of Free-Market Finance
Sep 16, 2013
Five years after the collapse of the U.S. investment bank Lehman Brothers, the world has still not addressed the fundamental cause of the subsequent financial crisis – an excess of debt. And that is why economic recovery has progressed much more slowly than anyone expected (in some countries, it has not come at all).
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Economic Analysis Isn’t Objective – It’s As Personal As It Gets
Sep 14, 2013
What happens when professionals lose touch with the people they’re supposed to serve?
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Conference paper
Central Banks in Balance Sheet Recessions: A Search for Correct Response
Apr 2013
These are extraordinary times for central banks. Near zero interest rates and massive liquidity injections are still failing to bring life back to so many economies in the developed world.
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Conference paper
The Future of Central Banking
Apr 2013
The exteriors of major central banks may be solid marble and doric columns, but, inside, monetary policy remains a work in progress.
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The Future of Central Banking
Apr 5, 2013 | 02:30—04:30
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Conference paper
Toward a Supply-Side Theory of Financial Innovation
Apr 2013
Innovation. The word is evocative of ideas, products and processes which have somehow made the world a better place. Prior to the global financial crisis, many viewed financial innovation as unequivocally falling into this category.
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Financial Stability Working Group
Apr 5, 2013 | 08:30—10:45
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Conference paper
Rationality and the Meese and Rogoff Exchange-Rate-Disconnect Puzzle: Learning vs. Contingent Knowledge
Apr 2013
There is much anecdotal evidence in the popular media, backed up by survey research, that participants in currency markets pay close attention to fundamental economic variables in forming their forecasts of future exchange rates.
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Conference paper
The Contingent Expectations Hypothesis: Rationality and Contingent Knowledge in Macroeconomics and Finance Theory
Apr 2013
For macroeconomists, an individual is rational if she uses her understanding of the way the economy works in making decisions that do not conflict with her objectives.
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Conference paper
Rationality in the Present-Value Model of Stock Prices: Fundamentals, Psychology, and Structural Change
Apr 2013
The present-value model of stock prices is a workhorse in financial economics. The model relates today’s price of a stock (or a basket of stocks) to the market’s forecasts of next-period’s price and dividend, appropriately discounted.
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Conference paper
Forward-Rate Bias, Contingent Knowledge, and Risk: Evidence from Developed and Developing Countries
Apr 2013
In this paper, we examine one of the core puzzles in International Macroeconomics, the so-called “forward-discount anomaly.”