Federal Reserve chairman Ben Bernanke is speaking now at his old employer, Princeton University. He has taken the opportunity to forget about current monetary policy, wonk out, and talk about “The Implications of the Financial Crisis for Economics”.
Mr Bernanke’s conclusion? There are not that many implications. Most of the economic theory was correct but regulators did not update their practices to keep up with financial innovation and when the crisis came they were slow in their response.
Most of Mr Bernanke’s speech deals with microeconomics – of bank runs, moral hazard, asset price bubbles, and market liquidity – which is a little odd given that the most valid criticisms are of macro models that did not predict the crisis, and could not predict the crisis since they do not have a financial sector. Read more
Economics majors are no less likely to vote than other majors, but if we do, we tend to cast our ballots for Republicans.
This according to a new study from the NY Fed that tests to see if those with undergraduate degrees in economics tend to incorporate our lessons on acting in rational self interest into our day-to-day lives.
Voting is, in economic terms, not very rational. A single person’s vote is unlikely to change the results of an election, so the costs (for instance, the opportunity cost of going to vote) outweigh the benefits.
And yet, it seems, we still do it as frequently as other majors. (On the other hand, one of the school’s polled is Florida Atlantic University – perhaps former students there, remembering the 2000 election, were acting rationally – voting because they thought the election could come down to a single vote).
But when we head to the polls, we vote Republican. Read more