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Buku
David Orrell

Economyths: Ten Ways That Economics Gets it Wrong

    Vladimir Bogdanovmembuat kutipan4 bulan yang lalu
    reduce a system to its fundamental components, discover the physical laws that rule them, express as mathematical equations, and solve.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    And for that matter: why do we need central banks? If the economy is efficient and self-stabilising, and markets are all-knowing, what is the point in having a Federal Reserve tweaking interest rates? Wouldn’t it be better to just let banks set their own interest rates according to the ‘law of supply and demand’?
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    Today’s economy can give us great deals largely because it punishes us in other ways.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    The psychologist Oliver James has described ‘affluenza’ as ‘placing a high value on money, possessions, appearances (physical and social) and fame’.27 The condition, which is prevalent in rich countries, places people at increased risk of mental disorders including anxiety, depression, and drug abuse. It is worsened by social inequality, which highlights differences in status, and is exploited by advertisers who drum up envy to drive sales. It is the shadow side of the American Dream.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    World GDP has grown enormously in recent decades, so if we were to insist that happiness and GDP are related, people must have been pretty damned miserable a hundred years ago, or a thousand years ago. But that doesn’t seem to have been the case.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    This argument can be summarised as the theory that the price is right. Markets can cost everything, including future risk. But if markets cannot correctly price a CDO2 mortgage contract, with its billion-page documentation, then they certainly can’t price something like the CO2 bond we hold with our billions of descendants.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    when you draw the box for the economy, you have to put it in a larger box called the environment. The human economy is a subset of the world system. Our inputs, in terms of natural resources, and outputs, including pollution, are like the metabolism of a kind of super-organism. We can analyse it using the same kinds of tools as we use to analyse other living systems, such as a cell, or a beehive, or a complete ecosystem.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    How to balance these different factors and combine them in a single indicator is obviously a difficult and ambiguous task, and the result is more like a report card, with a number of separate sections and a total overall grade, than a hard economic metric. The great appeal of the GDP is that it makes no such attempt – any transaction is the same as any other
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    One of the few bright spots from the credit crunch was that it helped reduce global carbon emissions by around 2.6 per cent in 2009, which was the largest annual fall in 40 years, according to the International Energy Agency
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    Darwin observed: ‘To kill an error is as good a service as, and sometimes even better than, the establishing of a new truth or fact.’
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    ironically, while corporations strongly regulate the behaviour of their employees, they oppose any external government regulation of their own behaviour on the grounds that it is inefficient)
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    So even though the laws that govern the economy are symmetrical and non-discriminatory, the system tends to evolve towards an increasingly skewed state. Time matters.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    The reason is that there is a positive feedback effect at work. A person whose sum has grown already from the initial $100 to $1,000 can hope to make another $100 in the coming year. They might instead lose that much, but at least they have the opportunity. Someone whose savings fund has shrunk to $10 can only hope to make another dollar.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    For example, the assumption of rational behaviour is a kind of symmetry, because it says that everyone, given the same preferences, would act in exactly the same way.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    His method was based on actuarial science – specifically, something called the broken heart syndrome. Actuaries had long known that when couples have lived together a long time, if one dies, the other has a high chance of also dying within a short time. A study showed that a partner’s death increased a woman’s chance of dying in the following year by a factor two, and a man’s chance of dying by a factor six. In mathematical terms, their deaths are correlated.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    The main problem with this male tilt and heroic posturing is that economic theory does more than study the economy – it also helps shape it
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    Just as there are more ways for numbers to be irrational than rational, and more ways to draw a crooked line than a straight line, so there are more ways to behave in an irrational fashion than a rational one (and we often seem to be bent on exploring them).
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    With their insistence on stability, normality and rationality, the models prevent us from learning from our mistakes, and therefore create their own form of risk.
    Thomas Munk Christensenmembuat kutipan4 tahun yang lalu
    One study of the 100 largest daily price changes in the S&P index over four decades found that, rather than being driven by news, most of the large changes happened on days when there was little to report
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