Archive for May 30th, 2012

Which Keynes for understanding the crisis?

May 30, 2012

I posted a paper by Carlos Zappia on how financial economics is likely to be more Keynesian  kind post crisis. His take was much of financial economics and decision theory is based on Bayesian probability. Bayesian in turn does not really model uncertainty which is core problem in financial decisions. What is instead needed is a behavioral decision theory which looks at the idea of uncertainty.

Work has started already on modeling these new paradigms. However,  none of this is new as Keynes meant the same in his animal spirits ideas. So it is going to resemble Keynesian ideas.

In another paper he expands the idea further.

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Competition between Western Capitalism and State Capitalism…

May 30, 2012

A nice article by Danny Leipziger of Growth Dialogue. Growth Commission headed by Michael Spence gave way to Growth dialogue. The idea was to continue the work of GC…

The author points to these two systems of capitalism – Western and State. In first government was minimal and in second it led capitalism (ironical but true):

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