Recipe for Disaster: The Formula That Killed Wall Street. A year ago, it was hardly unthinkable that a math wizard like David X. Li might someday earn a Nobel Prize. After all, financial economists—even Wall Street quants—have received the Nobel in economics before, and Li's work on measuring risk has had more impact, more quickly, than previous Nobel Prize-winning contributions…
Tag Archives Economics
Joshua Gans: The RBA Board meets tomorrow for the first time in 2009. As I argued last week, in my view the RBA ought to be cutting far more aggressively, and there is no reason not to use most or all of the ammunition they have available - cutting interest rates to 2% or below. There is no inflation risk,…
Crisis wipes $115b from Govt revenue. The global financial crisis has slashed a massive $115 billion from Government revenues over the next four years, Prime Minister Kevin Rudd has revealed. [ABC News: Breaking Stories]
The coming wave of Super and Tax debate... When will the country notice? Josh Gans comments..... Super-schmoopa. I have thought for some time that the real crisis in consumer confidence would come when Australians received the 6 monthly superannuation account statements. I got mine in December and much to my surprise it appeared to have lost only a little more…
Joshua Gans on Paul Krugman's "The return of Depression Economics". Well I finished the revised edition of Paul Krugman’s The Return of Depression Economics. He wrote the original almost 10 years ago with much the same theme: that we have not solved the boom and bust cycle and risk of prolonged recession and even depression remains. He deserves kudos for…
OECD figures show 'flash flood' stimulus not working. The Federal Opposition says the latest report on the world economy by the OECD shows that the United States is the only country to have spent more than Australia on economic stimulus packages. [ABC News: Breaking Stories]
Message to the Coalition: people respond to incentives. I was listening the other day to Tony Abbott claiming that the price elasticity of petrol is zero (Joshua Gans quotes the Coalition’s Greg Hunt making the same claim). It was perhaps the first time that I had heard a politician use the word ‘elasticity’, and it made me wonder whether Abbott…
Means testing the baby bonus. I had vowed to not say another word on the baby bonus but the renewed speculation that something might be done has drawn me out. The talk now is of means testing it. As Andrew Leigh notes, this would have to be done with plenty of care but nonetheless would be a good step forward.…
Another good one from Andrew Leigh. As we draw near to budget time, there has been plenty of talk about what “middle Australia” will get. But where exactly is the middle? To provide a more precise sense, I’ve tabulated the pre-tax annual income distributions for individuals and households, in the 2008-09 tax year. My raw data is the 2006 HILDA…