You searched for:
efficient markets
A glutton for punishment, I’ve decided the Zombie Economics book manuscript I submitted a month ago (mostly online here) is in urgent need of more zombies. I’ve been struck, even in that short space of time by the extent to which, with undeniable “green shoots” now appearing, the zombie ideas I’ve written about are clawing their way through the softening soil and walking among us again. The most amazing example is that of the Great Moderation – surely you would think no one could believe in this anymore, but they do.
So, I’m planning to add a bit to each chapter, pointing to examples of these ideas being revived. I’d appreciate good examples for the rest: Trickle Down, Micro-based Macro the Efficient Markets Hypothesis and Privatisation (of course, the Queensland government gives an example v close to home).
{ 27 comments }
I sent off the draft MS of my Zombie Economics book to the publisher last week, but there is still time for improvement. Over the fold is the second, and final part of the privatization chapter.
You can read most of the book (not always the final draft) at my wikidot site.
As always, comments and criticism much appreciated.
I’m on the final chapter of my long-promised Zombie Economics, dealing with ideas refuted by the Global Financial Crisis. My target this time is privatisation – more precisely, the idea that privatisation will always yield an improvement over public ownership, and, therefore that market liberalism is an advance on the mixed economy that developed in the during the post-1945 long boom.
As always, comments, criticism and suggestions much appreciated.
Updated In response to comments, I’ve added a bit more material on the 1970s and the background to privatisation.
For me the big change that came with the last decade was blogging. I started in 2002, and it’s been a big part of my life (sometimes too big) ever since. So, when it came to review the decade, the obvious place to look was the Wayback Machine, which captured my old blogspot blog on 27 July 2002. Looking at the blog as it was then, two things jump out at me
- Looking at the blogroll, I feel like the last of the Mohicans. The bloggers of those days have nearly all retired, and hardly any has a solo blog anymore. CT is something of an exception – quite a few of us still keep our personal blogs going. Mine is here.
- I’m singing the same song now as I was all those years ago. The top post on the page is about how the financial crisis has discredited the efficient markets hypothesis, trickle down economics, privatisation and so on. Of course that was the dotcom financial crisis of 2000-01. I think a few more people are paying attention this time around, but we will have to wait and see.
Another section of my book-in-progress, this time on the implications of trickle-down. I’m getting lots out of the comments, even if I don’t respond to everything, so please keep them coming.
One thing that would be really useful to me is references to publications (probably popular, rather than journal articles) by prominent academic economists that clearly espouse some of the implications of trickle-down discussed here. More than most of the ideas I’m criticising, trickle-down economics tends to be a background assumption rather than something which comes out into the open, and I want to avoid the suggestion that I’m attacking a straw zombie here.
[click to continue…]
I’m pushing hard now to finalise a draft of my book-in-progress,
It’s currently titled Zombie Economics:Undead Ideas that Threaten the World Economy. The title is pretty much locked in, but the subtitle is still open for change if anyone has any suggestions. You can read the first few chapters (not quite an up-to-date draft) at wikidot.
The chapter I’m working on now is Trickle-Down Economics, which seems a fairly soft target after the challenge of presenting a critique of the “micro foundations” approach to macroeconomics. But, there are still plenty of difficulties starting with the point that, of course, no-one espouses Trickle-Down Economics under that name. On the other hand, while the view that pro-rich policies will benefit everyone in the long run is widely held, I don’t know of a good general term that describes it.
Anyway here’s the opening section. As always, comments and criticism much appreciated.
It’s been slow going, but I’ve finally finished the draft chapter of my book-in-progress that looks forward to a new research program for macroeconomics, an absurdly ambitious task, but one that needs to be tackled. Of course, what I’ve written isn’t fundamentally new – it’s a distillation of points that Old Keynesians, post-Keynesians and some behavioral economists have been putting forward for a while. But I hope I’ve got some positive contribution to make. More than ever, comments are much appreciated.
Update In response to comments, I’ve fairly substantially revised the section on “avoiding stagflation”. While I don’t back away from the points I made previously, I took for granted some things that I’d mentioned in other places in the book. The result made for a fairly unbalanced treatment with an excessive focus on the role of labor militancy. I’ve now tried to put this into proper context. I don’t expect that will satisfy everybody, but this is closer to what I meant to say all along.End update
[click to continue…]
Work on my book-in-progress has been slowed by other commitments. Among other things I’m fighting privatisation proposals from a Queensland Labor government that seems to have learned entirely the wrong lessons from the global financial crisis. Here’s a section on the GFC and the failure of the micro-foundations approach to macroeconomics. As always, comments much appreciated
Another section from my book-in-progress. The book-so-far can be viewed here.
[click to continue…]
More bookblogging! It’s all economics here at CT these days, but normal programming will doubtless resume soon.
Most of what I’ve written in the book so far has been pretty easy. I’ve never believed the Efficient Markets Hypothesis or New Classical Macro and it’s easy enough to point out how the occurrence of a massive financial crisis leading to a prolonged macroeconomic crisis discredits them both.
I’m coming now to one of the most challenging section of my book, where I look at why the New Keynesian program (with which I have a lot of sympathy) and ask why New Keynesians (most obviously Ben Bernanke) didn’t, for the most part, see the crisis coming or offer much in response that would have been new to Keynes himself. Within the broad Keynesian camp, the people who foresaw some sort of crisis were the old-fashioned types, most notably Nouriel Roubini (and much less notably, me) who were concerned about trade imbalances, inadequate savings, and hypertrophic growth of the financial sector. Even this group didn’t foresee the way the crisis would actually develop, but that, I think is asking too much – every crisis is different.
My answer, broadly speaking is that the New Keynesians had plenty of useful insights but that the conventions of micro-based macroeconomics prevented them from forming the basis of a progressive research program.
Comments will be appreciated even more than usual. I really want to get this right, or as close as possible
[click to continue…]
I’ve been moving slowly on the book for the last few weeks, but I have taken one positive step to encourage further discussion. In response to suggestions from readers, I’ve started a wiki site imaginatively named Zombiecon where my plan is to post draft chapters. The Efficient Markets Hypothesis is already up. In part, the idea is to provide a reference to avoid some of the problems that arise from blogging a section at a time. But, if someone wants to create one or more talk pages on the site itself, that would be great. I’m not really sure joint editing in the mode of Wikipedia, but if you have suggested minor changes, go ahead and make them – I may revert or partially adopt them.
In any book on policy thinking, the easy bit (not all that easy!) is to write about what’s wrong with existing ideas, in my case the zombie ideas I’m writing about. The chapter plan for my book includes, in each chapter, a section on “What next”. As regards the Great Moderation, which was essentially an interpretative claim about the data, it’s not really clear what to include. I’m leaving the details of macroeconomic thinking and policy for another chapter and writing about how society should handle risk. Comments and criticism appreciated as always.
I’m in the process of setting up a site at wikidot.com where the whole draft will be presented in wiki format. But I’ve been travelling and haven’t managed to get it going yet.
[click to continue…]
Another section of the Great Moderation chapter from my book. I’m getting a lot of value from the comments, both favorable and critical, so please keep them coming.
Another longish extract from my book project. Corrections and suggestions of all kinds are welcome. I’m also thinking it might be good to have a website where it’s possible to look at, and comment on, all the draft chapters, but I suspect people prefer the atmosphere of a comments thread. Any thoughts on this?
The current working title for the book is Zombie Economics: Six Dead Ideas that Threaten the World Economy (suggestions for a better subtitle are welcome) and that requires a new intro.
Also, I’ve come to the view that “market liberalism”, as opposed to “economic liberalism”, is a better name for the viewpoint, based on the efficient financial markets hypothesis and other ideas criticised here, that has dominated policy thinking in recent decades.
Any thoughts on these points, or the revised intro, would be most welcome.
[click to continue…]