economics
Can There Be Too Much Finance?
By Dr. Pierre Canac –Finance certainly plays an indispensable and positive role in promoting economic growth and overall employment. However there is some evidence that the relationship between financial development and GDP growth is not linear, but instead has an inverse U-shape. As the size of the financial sector gets larger, at first GDP growth…
Read MoreA Critique of Behavioral Finance
By Dr. Hassan Shirvani—The recent global financial crisis has raised serious questions about the rationality of the securities markets. In rational markets, prices tend to closely track their fundamental values, so that there is little or no chance of getting price bubbles. During the run-up to the recent crisis, however, many asset prices, including those in the housing sector, seemingly deviated from their correct values, resulting in subsequent financial crashes around…
Read MoreEconomic Inequality in America
By Dr. Hassan Shirvani–The impressive body of empirical evidence recently furnished by the French economist Thomas Piketty and his associates clearly demonstrates that there is a worsening trend of income and wealth inequality in America. This trend, in effect since the beginning of the 19th century, managed to take a breather in the first half of the…
Read MoreIs There An Aerotropolis In Your Future?
By Dr. Roger Morefield — AEROTROPOLIS – THE “FIFTH WAVE” An aerotropolis is a city anchored by an airport. Your first reaction to this may be, “huh?” Like most people, you might see the airport as a place to get in and out of as quickly as possible, and not a very good place…
Read MoreThe Economics of Karl Marx
By Dr. Hassan Shirvani —Karl Marx (1818-1883) was one of the most influential economists of the 19th century. His economics provided a bridge between the classical economics (1776-1850) and the neoclassical economics (1870-1936), with the latter being a precursor to the modern conservative economics. Indeed, much of the neoclassical economics was a reaction against and…
Read MoreDoes the U.S. Government Debt Fit in a Bucket?
By Dr. Pierre Canac —Nobody will disagree that $12.8tn is a large and potentially scary number! That is the U.S. Gross Federal Debt held by the public at the end of 2014. However, if you divide this number by the U.S. Gross Domestic Product which is $17.7tn, we get about 73%. Is this a large…
Read MoreOil and Gas Industry: Good Advice from WEN Speaker
By Carolina Quintana Sanchez —Earlier this month, CSB and UST students joined Women’s Energy Network (WEN) guest speaker, Jeannie Gardner, who has more than 20 years of experience in the Oil and Gas Industry. She provided an insightful view on low oil prices, its impact on the energy industry, and gave practical advice to the audience.…
Read MoreLiquidity Traps: Old and New
By Hassan Shirvani—- The concept of a liquidity trap, introduced by the British economist John Maynard Keynes during the Great Depression of the 1930s, refers to the situation in which monetary policy becomes largely impotent in lowering interest rates to stimulate additional borrowing and spending in the economy. This can result from the fact that…
Read MoreIs it Time for Europe to Call in the Helicopter?
By Dr. Pierre Canac– “Let us suppose now that one day a helicopter flies over this community and drops an additional $1000 in bills from the sky, …. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated,” (Friedman 1969, pp 4–5). In one of…
Read MoreGermany and Greece Need to Learn How to Tango Together
By Dr. Pierre Canac—Prior to the 2007-2008 financial crisis, cross-countries financial flows triggered global imbalances whereby some countries experienced large current account surpluses (and capital outflows) while others faced large current account deficits (and capital inflows). Current Account and Capital Flows A country with a large current account deficit by definition has a large excess…
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