CSB Commentary
Negative Interest Rates: Unusual and a Difficult Phenomenon to Explain
With respect to interest rates, we live in a very interesting and indeed historical time. In some European countries, nominal interest rates are negative (while they are close to zero in the United States). A short while back this was thought to be impossible. Until it actually happened, it would have been difficult to imagine…
Read MoreFallacy of Composition in Economics
By Dr. Hassan Shirvani —-The fallacy of composition refers to the logically untenable position that what is true for a member of a group must necessarily also be true for the group as a whole. Perhaps a good example of this fallacy is the assertion that since an individual in a crowded room can obtain…
Read MoreThe Role of Non-financial Information in Detecting Financial Statement Fraud
By Evgeniya Sukhova—- INTRODUCTION In order to detect material misstatements in the financial statements of a company, auditors perform numerous analytical procedures, including analysis of relationships between financial and nonfinancial information. Inconsistency between financial and nonfinancial information can be a symptom of financial statements fraud. This type of fraud is most often carried out by…
Read MoreThe Economics of Friedrich Hayek
By Dr. Hassan Shirvani— Conservatives tend to idolize the Austrian economist Friedrich Hayek (1899-1992) in the same way that liberals like to lionize the British economist John Maynard Keynes (1883-1946). Indeed, during the Great Depression of the 1930s, the debate between the supporters of Hayek and Keynes dominated much of the academic economic scene. The…
Read MoreFraud Prevention
By Cassandra Andrews— A company or individual can never be 100% protected from fraud, but there are certain measures that a company or individual can take to be as protected as possible. Everyone who works in a company can be dishonest. There are two essential aspects that are key to having a low-fraud environment. The…
Read MoreInvestment Banking Principles: An Inside Look at Leveraged Investing and Risk Parity
By Austin J. Matt– Forethought Leveraged investing encompasses a tier of strategies utilized by investment banks for many years. It is the “black powder” used in portfolios managed by individual investors and institutions alike. Investment Banks’ “Black Powder” The world of investment banking is home to a plethora of strategies that all aim…
Read MoreInvestor Sentiment and Global Exchange Traded Funds
By Dr. Gulfem Bayram — The exchange traded funds (ETFs) are securities that track stock indexes, commodities, or baskets of assets, and they are traded on stock markets just like individual stocks. These unique securities have become increasingly popular in recent years as they offer greater diversity and flexibility for individual investors. Rapid Growth of…
Read MoreSay Goodbye to “Homo economicus”: The New Science of Behavioral Economics
By Dr. Roger Morefield — HOMO ECONOMICUS AND PARADIGM SHIFT In his 1962 book, The Structure of Scientific Revolutions, Thomas Kuhn described the process of what he called “paradigm shift,” which is a change in the basic assumptions underlying a science. Recent advances in the theory of consumer behavior have allowed the new science…
Read MoreA Primer on Keynesian Economics
By Dr. Hassan Shirvani —Before John Maynard Keynes published his General Theory of Employment, Interest, and Money in 1936, the prevailing view among most economists was that modern economies are characterized by perfectly competitive markets, in which flexible prices and wages cleared all markets and, hence, ensured continuous full employment. Pointing to the Great Depression…
Read MoreLa Paradoja que Es Colombia
Escrito Por Dr. Roger Morefield –- Bienvenidos a la “Nueva Colombia” (Read this post in English) Basado en el Ingreso Nacional Bruto per cápita (INB), Colombia llena los requisitos del Banco Mundial que la catalogan como un país de ingreso medio alto. Aun así, todavía tiene características de un país en desarrollo de bajos ingresos.…
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