by Summary:
From the perspective of those who work or are interested in finance, it seems obvious that business decisions are a major driver of the business cycle, assuming that policymakers are not doing anything particularly stupid (as in the Euro area in the post-crisis period). The important exception is the housing market, which is dependent upon the willingness of households to borrow insane amounts of money. (However, even this exception is dependent upon the decisions of the financial sector to extend the insane loans.) Conversely, one of the advantages of a mainstream economics education is that common sense is buried, and the view is that the primary driver of the business cycle is households' decisions to optimise consumption choices over time. The result is that the difficulty of
Topics:
Mike Norman considers the following as important: economic modeling, uncertainty
This could be interesting, too:
From the perspective of those who work or are interested in finance, it seems obvious that business decisions are a major driver of the business cycle, assuming that policymakers are not doing anything particularly stupid (as in the Euro area in the post-crisis period). The important exception is the housing market, which is dependent upon the willingness of households to borrow insane amounts of money. (However, even this exception is dependent upon the decisions of the financial sector to extend the insane loans.) Conversely, one of the advantages of a mainstream economics education is that common sense is buried, and the view is that the primary driver of the business cycle is households' decisions to optimise consumption choices over time. The result is that the difficulty of
Topics:
Mike Norman considers the following as important: economic modeling, uncertainty
This could be interesting, too:
Mike Norman writes Uncertainty — Brian Romanchuk
Mike Norman writes Lars P. Syll — Economics — too important to be left to economists
Mike Norman writes Lars P. Syll — Does it–really–take a model to beat a model?
Mike Norman writes A spreadsheet version of the IS/MY model (alternative to IS/LM model) — Dirk Ehnts
From the perspective of those who work or are interested in finance, it seems obvious that business decisions are a major driver of the business cycle, assuming that policymakers are not doing anything particularly stupid (as in the Euro area in the post-crisis period). The important exception is the housing market, which is dependent upon the willingness of households to borrow insane amounts of money. (However, even this exception is dependent upon the decisions of the financial sector to extend the insane loans.) Conversely, one of the advantages of a mainstream economics education is that common sense is buried, and the view is that the primary driver of the business cycle is households' decisions to optimise consumption choices over time. The result is that the difficulty of forecasting business sector decisions is swept under the carpet....