Archive for May 14th, 2008

A short literature survey on behavioral finance

May 14, 2008

I came across this short and comprehensive literature survey on behavioral finance by Martin Sewell.

However,  what i fiound more interesting is  Professor Sewell’s profile. He is a professor in Computer Science at University College London! His website is here and has written quite a few literature surveys on various aspects of financial markets like Efficient Market Hypothesis, Fund Management, Market Microstructure etc. 

Worth a look!!

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BoE says MPC is facing most difficult challenge

May 14, 2008

Bank of England released its inflation report for May 2008. It is a good report to understand the developments in the UK economy.

I just read the opening remarks which are not really comfortable:

As I described to you in February, the challenge facing the MPC is to balance two conflicting risks to the outlook for inflation in the medium term. On the downside, a sharper than expected slowing in activity would pull inflation below the target. On the upside, inflation, after a significant period above target, could have a greater tendency to persist. In the Committee’s judgement, the balance of these risks around the central projection is to the upside.

The Monetary Policy Committee is facing its most difficult challenge yet. For the time being, at least, the ‘nice’ decade is behind us. The credit cycle has turned. Commodity prices are rising. We are travelling along a bumpy road as the economy rebalances. Monetary policy cannot, and should not try to, prevent that adjustment. The Monetary Policy Committee must focus on bringing inflation back to the 2% target in the medium term. As our remit states, “the real stability upon which economic prosperity is founded requires that inflation remain low and stable for a long period of time.” Inflation will return to the target and growth will eventually recover to a sustainable rate. But we will need to be patient.

 

Assorted Links

May 14, 2008

1. IC Law Blog points to a paper on Hedge Fund regulation in India

2. MR points to a new website on prediction markets

3. WSJ  Blog points to Fedspeak – Bernanke, Dale Stern, Yellen

4. WSJ Blog pointsto a fantastic Richard Thaler interview 

5. Nudges offers tips to buy a house

6. PSD Blog summarises findings of a Small Business Financing Conference at World Bank

7. Hamilton of econbrowser doesn’t agree with Bernanke


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