Posts Tagged ‘Hassan Shirvani’
Is the Stock Market a Casino?
Detractors of the stock market often liken it to a casino. There are certainly some similarities. Many stock traders, not unlike gamblers, develop addictive personalities, are filled with greed for easy and quick riches, and often overestimate their chances of success. In addition, just like casinos, most stock markets seem to be skewed in favor…
Read MoreEmpiricism and Rationalism in Economics
Empiricism and Rationalism are two schools of philosophy, dating back to the ancient Greeks, dealing with how we obtain our knowledge of the external world. For Empiricists, such as Aristotle, this is best done through the evidence of our senses, that is, through empirical observations and experiments. For Rationalists, such as Plato, however, our senses…
Read MoreIs the U.S. National Debt Excessive?
As the recent tapering of the Fed purchases of government and mortgage-backed securities indicates, the efficacy of monetary policy in stimulating the US economy has started to face diminishing returns. Indeed, much of the 3.4 trillion dollars of new money pumped into the economy by the Fed over the past six years in response to…
Read MoreAre Financial Markets Efficient?
The efficient markets hypothesis (EMH) was developed in the 1960s to rationalize the empirical observation that security prices fluctuate randomly. According to EMH, the random character of security prices is simply a reflection of the fact that security markets are efficient. In efficient markets, new information comes to the market erratically and gets quickly reflected…
Read MoreThe Broken Window Fallacy and Keynesian Economics
Critics of Keynesian economics often use the so-called broken window fallacy, advanced in the 19th century by the French economist Frederick Bastiat, to reject the role of government spending in stabilizing the economy. According to this fallacy, if a hooligan breaks the window of a bakery, the subsequent repair expenditures by the baker will have…
Read MoreDealing with the Economic Crisis
The ongoing global economic crisis, if not addressed promptly, has the potential to further destabilize the existing world political and social order. As History shows, continued public discontent during economic and financial crises often provides a fertile ground for both revolutions and extremist movements. The recent Arab revolts owe as much to the current economic…
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