Laws

We discuss recent work on bounded rationality and learning in relation to Soros’ principle of reflexivity and stress the empirical importance of non-rational, almost self-fulfilling equilibria in positive feedback systems.

The fall of 2008 was scary. For most people, the aftermath of Lehman Brothers’ bankruptcy resembled a major earthquake with strong aftershocks. Official narratives have promoted the image of the crisis as a rare, unpreventable and unforeseen natural disaster, the “100-year flood.” Policymakers emphasize the extraordinary measures they have taken to prevent the system from collapsing and to support recovery since.

Debate about the pension crises has centered on certain questions such as: Are greedy government workers bankrupting states? Arepension-slashing politicians backed by big money saving the day? Or do the budget problems of state and localgovernments have more to do with wasteful corporate subsidies than pensions? What are the real policy solutions to the pressures placed on pensions?”

Five years after the end of the Great Recession, corporate profits are high and the stock market is booming. Yet most Americans are not sharing in the apparent prosperity.

Innovation, the commercialization of invention, is both desirable and necessary for growth and higher living standards in modern economies. Innovation’s contribution to the economy is being measured increasingly more precisely, and its contribution has been assessed aseconomically important and growing.

This article studies the reasons for the under-investment in research vs. development in the decentralized equilibrium and argues that this bias provides a micro-foundation for the government direct involvement in conducting applied research rather than just financing it.

John Kay shares findings from his new book, Other People’s Money, and his insights on changing the financial sector.

This research project improves our understanding of the effects of intellectual property rights—and in particular copyrights—on creativity and innovation.

Here we are, some 7 years after the Great Financial Crisis, and not one senior banking executive has gone to jail.