Archive for August 7th, 2014

How Political booms lead to financial instability…(any lessons for India??)

August 7, 2014

This is a pretty timely paper given the state of Indian politics and economics. It is by this trio of econs – Helios Herrera, Guillermo Ordoñez and Christoph Trebesch.

The kind of hype and expectations our financial markets have generated from the new govt is immense. Govt too is responsible making giving signals that things are going to be change as they are sworn in power. They are getting some reality check but our markets don’t care. One ought to be worried given how precarious the world economy is in. The earlier 9% times were when global economy was doing really well itself.  But currently it is at a precarious situation.Anyways, who cares.

So the paper look at this thing called political boom and how it eventually leads to financial crisis. It is even a better predictor than several sophisticated early warning indicators:

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Why researchers need to climb down from their ivy towers and see the real world…

August 7, 2014

One doesn’t know when academicians and researchers became ivy league types. One way to look at ivy league is to differentiate a select set of universities/colleges from others. But then it has also moved into another direction where Professors/researchers ( I mean economics ones) are completely cut-off from the real world. The end result has been chasing research which matters little and little as days pass by. Even teaching has been highly inspirational as one sees a very different world from what is taught. What better way to explain this than the famous Occupy Harvard where students walked out of Prof Mankiw’s class.

So it is kind of odd to read articles like this. HBSWK reviews research of Prof Nava Ashraf of HBS. She apparently descends from the Ivy League and involves people for whom the researchis being done.

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