economics Archives - Page 18 of 50 - Stable Genius Liberal

Bitcoin represents what ought to be the final refutation of the efficient-markets hypothesis

But in the case of Bitcoin, there is no source of value whatsoever. The computing power used to mine the Bitcoin is gone once the run has finished and cannot be reused for a more productive purpose. If Bitcoins cease to be accepted in payment for goods and services, their value will be precisely zero.

According to the efficient-markets hypothesis (EMH), which still dominates the analysis of financial markets, this should be impossible. The EMH states that the market value of an asset is equal to the best available estimate of the value of the services or income flows it will generate. In the case of a company stock, this is the discounted value of future earnings. Since Bitcoins do not generate any actual earnings, they must appreciate in value to ensure that people are willing to hold them. But an endless appreciation, with no flow of earnings or liquidation value, is precisely the kind of bubble the EMH says can’t happen.

Quiggin hits the nail on the head with this one. Bitcoin should be called bubblecoin.

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When interest rates are close to the rate of economic growth, Gagnon continues, you can run a budget deficit forever as long as the primary deficit is balanced. The debt load as a share of the economy won’t increase over time. And if interest rates are lower than the pace of growth — as they… Continue reading Untitled

Rortybomb: What Does the Leaked Brown-Vitter Bill on Too Big To Fail Do?

It gets very technical, but the 1st third of the article is an easy read and worth reading. Explains what is and what is not in Brown-Vitter and has an easy to understand chart.

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with Hayek, as with Reagan, the truly amazing thing is that we have people citing as a source of wisdom someone who has been as thoroughly refuted by history as anyone can be. Three generations into the modern welfare state, and western democracies look less Stalinist than ever. Jack-booted Insurance-bringing Thugs

What Problem Are DC’s New Food Truck Regulations Trying To Solve?

I know some people of a market urbanist persuasion take the view that trucks’ very existence is a sign of the failure of zoning codes and regulations, but I actually think trucks are an important lunch solution on the merits.

I would not be surprised if these regulations are being pushed by the fast food industry.

Prices out of Park Slope: America needs more filtering and less gentrification.

it’s still possible to step back from the distributive conflict, and say that as long as we’re parceling out a fixed supply of Park Slope someone is going to get stuck with that longer subway ride. But if you can actually make more Park Slope—either by building more houses there or improving the quality of subway access to other parts of Brooklyn—then you’re making progress on a more fundamental level.

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When Europe began its infatuation with austerity, top officials dismissed concerns that slashing spending and raising taxes in depressed economies might deepen their depressions. On the contrary, they insisted, such policies would actually boost economies by inspiring confidence. But the confidence fairy was a no-show. Nations imposing harsh austerity suffered deep economic downturns; the harsher… Continue reading Untitled

Austerity. The best way to go from developed nation to emerging market.

A major fund manager has reclassified Greece from a developed to an emerging market, in an unprecedented move reflecting the “unfortunate economic tailspin” of the Greek economy, which has threatened the future of the euro.

Of course, the solution will be, More Austerity! It always is.

How to Make School Lunches Healthier

A better option was to replace these snacks with an array of fruits. This way, when students were waiting to check out, the impulse temptations were healthier options. Fruit sales increased, snack food sales decreased, and total revenue did not significantly decrease.

Oddly enough, the same sales techniques used to sell junk food work to sell fruits and veggies.

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Economics 101 tells us to be very cautious about attempts to legislate market outcomes. Every textbook — mine included — lays out the unintended consequences that flow from policies like rent controls or agricultural price supports. And even most liberal economists would, I suspect, agree that setting a minimum wage of, say, $20 an hour… Continue reading Untitled