Archive for April 25th, 2007

Assorted Links…mostly Hedge Funds (25 Apr 2007)

April 25, 2007

Read this about Hedge Fund pay packets (From FT)

The combined earnings of the world’s top 25 hedge fund managers of more than $14bn (£7.49bn) exceeded the national income of Jordan last year and 3 individuals took home more than $1bn, according to the biggest annual industry survey.

The survey by Alpha Magazine put Jim Simons of Renaissance Technologies on earnings of $1.7bn, Ken Griffin of Citadel Investment Group on $1.4bn and Eddie Lampert of ESL Investments on $1.3bn. The previous year, two managers, Mr Simons and the septuagenarian T Boone Pickens of BP Capital Management, topped the $1bn mark.

  1. An excellent series of articles on Hedge Funds
  2. Read this good blog entry on Why is the top one percent earning more?
  3. Hedge Fund – a billion dollar club
  4. Return of the idiot ( a nice article on Latin America)

Thanks to Marginal Revolution for (3) and to Ajay Shah for (4)

Steven Levitt..time to defend your research

April 25, 2007

This morning I read two blogs (here and here) which mentioned about Steven Levitt (his wikipedia profile is here) and his impact on economic research. Both the blogs quote newspaper article which criticise Levitt’s research ( R’ber he is somebody who has been awarded the Clark medal ; For the uninitiated Levitt’s research is on crime, population etc; he has coauthored the popular book Freakonomics)

He has often been criticised for giving rise to something which has been called “cuteo- nomics” i.e. asking questions which may not be economics but could simply be a good reading ( most I am sure don’t agree). As he is hugely admired (because of Clark Medal) , the traditional economists have criticised him for making this field popular and making people look at all kinds of questions and calling them economists. The article does talk about few students who trained under Levitt and have written papers which could be interesting to read but you really cannot call it economics.

My view on this is that Levitt kind of research is interesting in the sense it helps us look at answers to those questions which have not been attempted before and gives a new dimension to the research. We often come across problems related to research where we have no data, do not know how to interpret results in different ways, this is where Freakonomics kind of analysis helps. However, everything has to balanced. The problem is not with the research perse but the proliferation of the same and in times when we are still struggling to answer basic questions in economics (what drives growth, how to reduce poverty etc). This is an area of concern and as the article shows Levitt has not been doing enough to defend his style of research. He is in fact promoting his style to answer more cute questions than traditional economic questions.


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