Joseph Stiglitz Speaks at ANU

I went to see the "Crawford School Oratory" today given by Joseph Stiglitz - just one of the stops on his Australian tour. As you probably know he is a Nobel Prize winning economist who was chief economist at the World Bank and since then has been critical of both the Bank and the IMF and increasingly of other financial institutions and free market oriented capitalism in general. The talk was

Inheritance and Economic Growth

I am reading an interesting paper by Thomas Piketty on inheritance and economic growth. It's a long paper with lots of stuff in it. But here is the key point. They construct time series for inheritance (both bequests and inter-vivos transfers) for France over almost 200 years. One source is French estate tax data and the other a model of demography, saving etc. The gap between the two series (

ReSPecT

My immediate reaction to the RSPT proposal was to wonder if it will ever get through parliament as proposed and to suggest that at least the hurdle rate needed to be substantially raised. Today in the Australian, Henry Ergas discusses the "Brown tax" named after E. Carey Brown. I'll admit that I hadn't heard that term before. A quick search found a reference to this in a working paper by Ben

Too Big to Fail

The Obama administration is acting to do something about the too big too fail phenomenon, which I flagged as a possible policy direction. I'm not enthusiastic though about the anti hedge fund/proprietary trading moves that are accompanying this. Luckily none of the crazier ideas in Jackson's book are included. I'd favor limits on risk budgets rather than just banning institutions from certain

Another Review of Taleb

I wrote a very short review of "The Black Swan" a little while ago. Here is a good but very long review of Nicholas Nassim Taleb. A summary would be: "Taleb is unoriginal when right, otherwise wrong (especially about option pricing), and a dilettante/crank".

Book Reviews: Zilliak and McCloskey and Taleb

Shuang brought home borrowed copies of Ziliak and McCloskey's "Cult of Statistical Signficance" and Taleb's "The Black Swan". in a way both are rants against standard practice in quantitative analysis. But Taleb's book is ten times better or more than Ziliak and McCloskey's. The latter have a single point that researchers often misuse the concept of statistical significance and ignore the actual