WB’s chief econ Justin Lin picks lyrics from Paul McCartney’s song:
Archive for May 22nd, 2012
Niranjan Rajadhyaksha in his terrific new column – The Impartial Spectator –twists the debate:
I have always been thinking about how game theory can be used to understand repo markets. I mean it is a classic market for applying game theory ideas given the dynamic nature of both the fields.
Somebody has surplus funds, somebody has securities to offer. Should the lender offer funds to the bank or to the central bank? Should the borrower borrow from markets or central bank?
Coming from the Austrian School, speaking on such topics is like a cakewalk.
Knowledge has its counterpart in action, and your actions emerge from your normative calls in personal policy-making. On those two steps I propose to bring to the traditional Hayekian knowledge problem a prism of Smithian moral analysis. This approach perhaps sheds new light on the absurdities and profound quackishness of statist pretenses of knowledge.
He discusses how Knowledge entails three facets, information, interpretation, and judgment. We usually focus on information but not much on interpretation which is far more critical. There is a nice Sherlock Holmes story to show the difference.
The broader criticism is on government and regulators who seem to think they know what to do/regulate etc.