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Mechanism design By the Spence–Mirrlees condition the optimal price and allocation schedules must be monotonic, so the designer must eliminate any interval over which the schedule changes direction by flattening it. Intuitively, what is going on is the designer finds it optimal to bunch certain types together and give them the same contract. Normally the designer motivates higher types to distinguish themselves by giving them a better deal. If there are insufficiently few higher types on the margin the designer does not find it worthwhile to grant lower types a concession (called their information rent) in order to charge higher types a type-specific contract. Consider a monopolist principal selling to agents with quasilinear utility, the example above. Suppose the allocation schedule formula_28 satisfying the first-order conditions has a single interior peak at formula_78 and a single interior trough at formula_79, illustrated at right. The proof uses the theory of optimal control. It considers the set of intervals formula_92 in the nonmonotonic region of formula_28 over which it might flatten the schedule. It then writes a Hamiltonian to obtain necessary conditions for a formula_28 within the intervals Condition two ensures that the formula_28 satisfying the optimal control problem reconnects to the schedule in the original problem at the interval boundaries (no jumps). Any formula_28 satisfying the necessary conditions must be flat because it must be monotonic and yet reconnect at the boundaries | https://en.wikipedia.org/wiki?curid=689895 |
Mechanism design As before maximize the principal's expected payoff, but this time subject to the monotonicity constraint and use a Hamiltonian to do it, with shadow price formula_98 where formula_10 is a state variable and formula_101 the control. As usual in optimal control the costate evolution equation must satisfy Taking advantage of condition 2, note the monotonicity constraint is not binding at the boundaries of the formula_1 interval, meaning the costate variable condition can be integrated and also equals 0 The average distortion of the principal's surplus must be 0. To flatten the schedule, find an formula_10 such that its inverse image maps to a formula_1 interval satisfying the condition above. | https://en.wikipedia.org/wiki?curid=689895 |
Globalization and Its Discontents is a book published in 2002 by the 2001 Nobel laureate Joseph E. Stiglitz. The book draws on Stiglitz's personal experience as chairman of the Council of Economic Advisers under Bill Clinton from 1993 and chief economist at the World Bank from 1997. During this period Stiglitz became disillusioned with the IMF and other international institutions, which he came to believe acted against the interests of impoverished developing countries. Stiglitz argues that the policies pursued by the IMF are based on neoliberal assumptions that are fundamentally unsound: Behind the free market ideology there is a model, often attributed to Adam Smith, which argues that market forces—the profit motive—drive the economy to efficient outcomes as if by an invisible hand. One of the great achievements of modern economics is to show the sense in which, and the conditions under which, Smith's conclusion is correct. It turns out that these conditions are highly restrictive. Indeed, more recent advances in economic theory—ironically occurring precisely during the period of the most relentless pursuit of the Washington Consensus policies—have shown that whenever information is imperfect and markets incomplete, which is to say always, and especially in developing countries, then the invisible hand works most imperfectly. Significantly, there are desirable government interventions which, in principle, can improve upon the efficiency of the market | https://en.wikipedia.org/wiki?curid=693449 |
Globalization and Its Discontents These restrictions on the conditions under which markets result in efficiency are important—many of the key activities of government can be understood as responses to the resulting market failures. Stiglitz argues that IMF policies contributed to bringing about the 1997 Asian financial crisis, as well as the Argentine economic crisis. Also noted was the failure of Russia's conversion to a market economy and low levels of development in Sub-Saharan Africa. Specific policies criticised by Stiglitz include fiscal austerity, high interest rates, trade liberalization, and the liberalization of capital markets and insistence on the privatization of state assets. The theories which guide the IMF's policies are empirically flawed. Free market, neoclassical, and neoliberal are all essentially euphemisms for the disastrous laissez-faire economics of the late 19th century. This approach seeks to minimize the role of government—arguing that lower wages solve problems of unemployment, and relying upon trickle-down economics (the belief that growth and wealth will trickle down to all segments of society) to address poverty. Stiglitz finds no evidence to support this belief, and considers the 'Washington Consensus' policy of free markets to be a blend of ideology and bad science. Joseph Stiglitz was awarded the 2001 Nobel Prize in Economic Sciences (shared with George Akerlof and Michael Spence) for demonstrating how information affects markets | https://en.wikipedia.org/wiki?curid=693449 |
Globalization and Its Discontents Without equal access to information between employer and employee, company and consumer, or (in the IMF's case) lender and debtor, there is no chance of "free" markets operating efficiently. (This explanation also owes much to the earlier Nobel work of Kenneth Arrow and Gérard Debreu.) Stiglitz explains that globalization could be either success or failure, depending on its management. There is a success when it is managed by national government by embracing their characteristics of each individual country; however, there is a failure when it is managed by international institutions such as IMF. Globalization is beneficial under the condition that the economic management operated by national government and the example is East Asian countries. Those countries (especially South Korea and Taiwan) were based on exports through which they were able to close technological, capital and knowledge gaps. By managing national pace of change and speed of liberalization on their own, those countries were able to achieve economic growth. The countries who received the benefits from the globalization shared their profits equally. However, Stiglitz believes that if the national economy regulated by international institutions there could be an adverse effect. It is because the international institutions such as IMF, WTO, and World Bank lack transparency and accountability | https://en.wikipedia.org/wiki?curid=693449 |
Globalization and Its Discontents Without government oversight, they reach decisions without public debate and resolve trade disputes involving "uncompetitive" or "onerous" environmental, labor, and capital laws in secret tribunals—without appeal to a nation's courts. In East Asia's financial crisis, Russia's failed conversion to a market economy, failed development in sub-Saharan Africa, and financial meltdown in Argentina, Stiglitz argues that IMF policies contributed to a disaster: It failed to promote productive investment opportunities and demand for credit of quality; only well-planned loans, based on high quality economic and sector work, lead to improved design, effective implementation, and lower cost. It is better to spend more time getting the program right than to lend prematurely. However, none of these were done. As a result, loans came with extensive conditions that subverted the growth of democracy, hampered local economic growth, and enriched multinational corporations. To evaluate his conclusion, it is instructive to look at those cases where Third World development actually succeeded: South Asia and China are the world's two greatest emerging markets. South Asia repeatedly resisted IMF conditions (especially South Korea and Malaysia) and China declined any IMF money whatsoever. According to Stiglitz, IMF interventions all followed a similar free market formula. The IMF strongly advocated "shock therapy" in a rush to market economies, without first establishing institutions to protect the public and local commerce | https://en.wikipedia.org/wiki?curid=693449 |
Globalization and Its Discontents Local social, political, and economic considerations were largely ignored. Privatization without land reform or strong competitive policies resulted in crony capitalism, large businesses run by organized crime, and neo-feudalism without a middle class. There is no doubt that monetary aid/lending could have an important and effective role in advocating country efforts to sustain external shocks and improve economic status but without strong forefront progress on the policy, the aid of balance of payments help could very well be counterproductive. The consequence will be escalated levels of debt, weakened policy credibility and a lot more difficult task of adjustment in the future. The IMF also foisted premature capital market liberalization (free flow of capital) without institutional regulation of the financial sector. This destabilized entire developing economies by causing massive inflows of 'hot' short-term investment capital; then when inflation rose, the IMF's loan conditions imposed fiscal austerity and dramatically rising interest rates. This led to widespread bankruptcies without legal protection, massive unemployment without a social safety net, and the prompt withdrawal of foreign capital. The few remaining solvent owners, with zero opportunity for business growth, stripped assets for any value they could. With loans defaulted and entire nations thrown into economic and social chaos, the IMF rushed bailouts directed mainly to foreign creditors | https://en.wikipedia.org/wiki?curid=693449 |
Globalization and Its Discontents This fueled speculative runs on currency, and most of the bailout money soon wound up in Swiss and Caribbean bank accounts. As a result, Third World citizens carried much of the costs and few of the benefits of IMF loans, and a moral hazard ensued among the financial community: foreign creditors made bad loans, knowing that if the debtors defaulted, the IMF would pick up the tab (see Long Term Capital Management, whose overexposure in Southeast Asia might have brought down international financial markets without a massive bailout). Meanwhile, the IMF urged cash-strapped countries to further privatize—in effect selling their assets at a fraction of their value to raise cash. Foreign corporations then bought up the assets at rock-bottom prices. Predictably, great resentment resulted from the IMF's agenda. Stabilization is on the agenda; job creation is not. Taxation, and its adverse effects, are on the agenda; land reform is off. There is money to bail out banks but not to pay for improved education and health services, let alone to bail out workers who are thrown out of their jobs as a result of the IMF's macroeconomic mismanagement. Ordinary people as well as many government officials and business people continue to refer to the economic and social storm that hit their nations simply as 'the IMF' — the way one would say 'the plague' or 'the Great Depression' [80-81, 97]. John Maynard Keynes helped conceive of the IMF as a fund to help developing countries grow at full employment | https://en.wikipedia.org/wiki?curid=693449 |
Globalization and Its Discontents So why the consistent and disastrous failure to live up to this mandate? The IMF is pursuing not just the objectives set out in its original mandate, of enhancing global stability and ensuring that there are funds for countries facing a threat of recession to pursue expansionary policies. It is also pursuing the interests of the financial community. This means that the IMF has objectives that are often in conflict with each other [206-7]. The global financial community apparently did not see the IMF's track record as one of conflicted interests or consistent failure: IMF managing director Stanley Fischer and Treasury Secretary Robert Rubin both left for multimillion-dollar jobs at Citigroup. Stiglitz believes the IMF and World Bank should be reformed, not dismantled—with a growing population, malaria and AIDS pandemics, and global environmental challenges, Keynes' mandate for equitable growth is more urgent now than ever. He advocates a gradual, sequential, and selective approach to institutional development, land reform and privatization, capital market liberalization, competition policies, worker safety nets, health infrastructure, and education. Different countries will need to follow different paths. Selective policies would direct funds to programs and governments which had success in the past. He also points out "global governance without global government," and suggests that we need to recognize the inequities of the "global economic architecture | https://en.wikipedia.org/wiki?curid=693449 |
Globalization and Its Discontents " Based on the recognition, there is a need of rectification of the developed nations oriented imbalances, and should focus on developing nations. Lastly, democratic disciplines are needed to ensure that financial institutions serve general interests. Debt forgiveness should be extended, building on the success of the Jubilee Movement. Since the IMF loans primarily benefited foreigners and government officials, he argues it is unjust and onerous that citizens of developing nations be heavily taxed to pay them off. Not coincidentally, Stiglitz believes that promoting local and international democracy is fundamental to reforming global economic policy. Democracy aids social stability, empowers the free flow of information, and promotes a decentralized economy upon which efficient and equitable economies rely. Extending IMF and WTO voting rights to developing countries, along with public accountability, would be a good start. For Stiglitz, promoting democracy comes before promoting business. Stiglitz argues current procedures for globalization is “global governance without global government. ” Unlike states, which separation of powers exists, International financial institutions, IMF, WTO, and World Bank, lack any necessary checks and balances. Those international financial institutions are isolated and sole deciders of financial policies and enforce without hearing any dissenting opinions, generally developing countries | https://en.wikipedia.org/wiki?curid=693449 |
Globalization and Its Discontents IMF’s reckless liberalization, privatization, and deregulation violate developing countries’ sovereignties. Thus rather than working for equity and extermination of poverty, financial institutions become spokespersons of the financial community. The procedures and rhetoric of financial institutions widen the gap between developed and developing, which resulted from undemocratic paternalism and lack of accountability, transparency. Undemocratic paternalism is inflicted through ideology, assuming the model IMF presents is universally applicable. Moreover, lack of accountability and transparency is pronounced in unfair trade agenda, the Uruguay round. The North, EU and US achieved bilateral conventions called Blair House Agreement to circumscribe the regulations imposed on subsidization of agriculture, leading to the failure of Uruguay round and exposing developing countries to greater risk and volatility. Stiglitz dismisses the current global governance without global government and champions global social justice, global affinity to exterminate poverty and create better environment. "Globalisation and Its Discontents" has earned praises from many reviewers. Noted investor, George Soros describes the book as "Penetrating, insightful... A seminal work that must be read." Will Hutton from the British Guardian wrote: "Stiglitz finishes his book with seven action points for change | https://en.wikipedia.org/wiki?curid=693449 |
Globalization and Its Discontents He is not a global pessimist, but a realist - and instead of placing him in a neat box labelled 'important contribution to the debate,' we should listen to him urgently." The influential New York Review of Books stated that "Joseph Stiglitz [...] has made incisive and highly valued contributions to the explanation of an astonishingly broad range of economic phenomena, including taxes, interest rates, consumer behavior, corporate finance, and much else. Especially among econ-omists who are still of active working age, he ranks as a titan of the field," concluding that "Stiglitz’s book will surely claim a large place on the public stage. It certainly stands as the most forceful argument that has yet been made against the IMF and its policies." Business Week's Michael J. Mandel opined that “Stiglitz had a ringside seat for most of the major economic events of the last decade, including the Asian economic crisis and the transition of the former Soviet economies, as well as the administration of development programs throughout the world… This book recounts Stiglitz’s experiences, opening a window on previously unseen aspects of global economic policy. It is designed to provoke a healthy debate and… shows us in poignant terms why developing nations feel the economic deck is stacked against them.” The book has also received criticisms from various opponents of his intellectual work affiliated with libertarian and (neo)conservative schools of thought. For instance, D. W | https://en.wikipedia.org/wiki?curid=693449 |
Globalization and Its Discontents MacKenzie claims in the libertarian journal Public Choice that Stiglitz mischaracterizes government failures as market failures. Most of Stiglitz's examples refer to government intervention that benefited special interests. Such examples are collective action failures of government through rent seeking. Kenneth Rogoff, IMF Director of research, called Stiglitz's analysis "at best highly controversial, at worst, snake oil" and stated that "The Stiglitzian prescription (for third world nations in a debt crisis) is to raise the profile of fiscal deficits, that is, to issue more debt and to print more money. You seem to believe that if a distressed government issues more currency, its citizens will suddenly think it more valuable. You seem to believe that when investors are no longer willing to hold a government's debt, all that needs to be done is to increase the supply and it will sell like hot cakes." Daniel T. Griswold of the libertarian think tank Cato Institute labels the book a "score-settling exercise distorted by the author's own political prejudices and personal animus." Griswold takes issue with what he claims is Stiglitz's assumption "that protectionism enriches those nations that practice it" and notes that "while he is not questioning free trade, Stiglitz is disparaging the free flow of capital. The book blames the East Asian Financial Crisis almost entirely on one factor: capital account liberalisation." Stiglitz demonstrates this belief by "prais[ing] Malaysia for spurning IMF advice .. | https://en.wikipedia.org/wiki?curid=693449 |
Globalization and Its Discontents by imposing capital controls to stem the flight of short term flows." Griswold also states that Stiglitz provided no evidence to support his belief that Malaysia was rewarded for their efforts. He counters that Malaysia's GDP growth rate had fallen much farther than the other countries listed by Stiglitz, down to 6.7% and "recovered less rapidly in 1999 and 2000 even though [others] did not resort to capital controls Stiglitz champions." Griswold concludes by arguing that Stiglitz "distorts the history of the East Asian Miracle", while with Russian privatisation he "ignores the fact that Russia's initial reforms were timid and half baked" and that the IMF with its beliefs in bail outs and non-market exchange rates is not the "great symbol of market fundamentalism". | https://en.wikipedia.org/wiki?curid=693449 |
Zur Geschichte der Handelsgesellschaften im Mittelalter Zur Geschichte der Handelgesellschaften im Mittelalter is a doctoral dissertation written in 1889 by Max Weber, a German economist and sociologist. The original edition was in German and the title is actually translated as The history of commercial partnerships in the Middle Ages. Weber examined various legal principles according to the profit, risk and cost of an enterprise were carried by several individuals in the Middle Ages. | https://en.wikipedia.org/wiki?curid=694410 |
The Stock Exchange (book) The Stock Exchange (in German: Die Börse) is an 1896 book written by Max Weber, a German economist and sociologist. During the 1890s the stock exchange had become the symbol of capitalism in Germany. During 1894–1896 Weber wrote a number of essays about stock exchange, in which he argued against the popular view that the stock exchange was a fraudulent enterprise designed to abuse "the honest working people." Weber in his research on the stock exchange concentrated on two subjects. First, he showed that commercialization could help create or destroy cultural values, sometimes doing both at the same time - it had destroyed the values of patriarchalism, but created the opportunities for farm workers. The stock exchange itself has facilitated the expansion of trade, but at the same time it did allow for new ways of crime and abuse. Second, Weber showed that economic conduct was an integral part of ideas related to pursuing economic interests, but those ideas have to be viewed separately. | https://en.wikipedia.org/wiki?curid=694438 |
Optimum sustainable yield In population ecology and economics, optimum sustainable yield is the level of effort (LOE) that maximizes the difference between total revenue and total cost. Or, where marginal revenue equals marginal cost. This level of effort maximizes the economic profit, or rent, of the resource being utilized. It usually corresponds to an effort level lower than that of maximum sustainable yield. In environmental science, optimum sustainable yield is the largest economical yield of a renewable resource achievable over a long time period without decreasing the ability of the population or its environment to support the continuation of this level of yield, and enables an ecosystem to have a high aesthetic value. This concept is widely used specifically in the management of fisheries, where surplus fish are removed so the population stays at its carrying capacity. This allows the most fish to be harvested while still maintaining maximum population growth. | https://en.wikipedia.org/wiki?curid=694751 |
Niall Ferguson Niall Campbell Ferguson (; born 18 April 1964) is a Scottish-born historian. He is a senior fellow at the Hoover Institution. Previously, he was a professor at Harvard University and New York University, visiting professor at New College of the Humanities and senior research fellow at Jesus College, Oxford. Ferguson writes and lectures on international history, economic and financial history and British and American imperialism. He is known for his contrarian views and his defence of the British empire. He once ironically called himself "a fully paid-up member of the neo-imperialist gang" following the 2003 invasion of Iraq. Ferguson has been a contributing editor for Bloomberg Television and a columnist for "Newsweek". Ferguson has written and presented numerous television documentary series, including "The Ascent of Money", which won an International Emmy award for Best Documentary in 2009. In 2004, he was named as one of "TIME" magazine's 100 most influential people in the world. Ferguson was born in Glasgow, Scotland, on 18 April 1964 to James Campbell Ferguson, a doctor, and Molly Archibald Hamilton, a physics teacher. He attended The Glasgow Academy. He was brought up as, and remains, an atheist, though he has encouraged his children to study religion and attends church occasionally. Ferguson cites his father as instilling in him a strong sense of self-discipline and of the moral value of work, while his mother encouraged his creative side. His journalist maternal grandfather encouraged him to write | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Ferguson ascribes his decision to read History at University instead of English Literature to two main factors: Leo Tolstoy's reflections on History at the end of War and Peace (which he read at the age of fifteen), and his great admiration of historian A. J. P. Taylor. Ferguson received a demyship (highest scholarship) from Magdalen College, Oxford. Whilst a student there, he wrote a 90-minute student film "The Labours of Hercules Sprote", played double bass in a jazz band "Night in Tunisia", edited the student magazine "Tributary", and befriended Andrew Sullivan, who shared his interest in right-wing politics and punk music. He had become a Thatcherite by 1982. He graduated with a first-class honours degree in history in 1985. Ferguson studied as a Hanseatic Scholar in Hamburg and Berlin in 1987 and 1988. He received his Doctor of Philosophy degree from the University of Oxford in 1989: his dissertation was titled "Business and Politics in the German Inflation: Hamburg 1914–1924". In 1989, Ferguson worked as a research fellow at Christ's College, Cambridge. From 1990 to 1992 he was an official fellow and lecturer at Peterhouse, Cambridge. He then became a fellow and tutor in modern history at Jesus College, Oxford, where in 2000 he was named a professor of political and financial history. In 2002 Ferguson became the John Herzog Professor in Financial History at New York University Stern School of Business, and in 2004 he became the Laurence A | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Tisch Professor of History at Harvard University and William Ziegler Professor of Business Administration at Harvard Business School. From 2010 to 2011, Ferguson held the Philippe Roman Chair in history and international affairs at the London School of Economics. In 2016 Ferguson left Harvard to become a senior fellow at the Hoover Institution, where he had been an adjunct fellow since 2005. Ferguson has received honorary degrees from the University of Buckingham, Macquarie University (Australia) and Universidad Adolfo Ibáñez (Chile). In May 2010, Michael Gove, education secretary, asked Ferguson to advise on the development of a new history syllabus, to be entitled "history as a connected narrative", for schools in England and Wales. In June 2011, he joined other academics to set up the New College of the Humanities, a private college in London. In 2018, Ferguson apologized after fellow historians criticized him for only inviting white men as speakers to a Stanford conference on applied history. Also in 2018, emails documenting Ferguson's attempts to discredit a progressive activist student at Stanford University who had been critical of Ferguson's choices of speakers invited to the Cardinal Conversations free speech initiative were released to the public and University administrators. He teamed with a Republican student group to find information that might discredit the student. Ferguson resigned from leadership of the program once university administrators became aware of his actions | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Ferguson responded in his column saying, "Re-reading my emails now, I am struck by their juvenile, jocular tone. “A famous victory,” I wrote the morning after the Murray event. “Now we turn to the more subtle game of grinding them down on the committee. The price of liberty is eternal vigilance.” Then I added: “Some opposition research on Mr O might also be worthwhile” — a reference to the leader of the protests. None of this happened. The meetings of the student committee were repeatedly postponed. No one ever did any digging on “Mr O”. The spring vacation arrived. The only thing that came of the emails was that their circulation led to my stepping down." In 2000, Ferguson was a founding director of Boxmind, an Oxford-based educational technology company. In 2006, he set up Chimerica Media Ltd., a London based television production company. In 2007, Ferguson was appointed as an investment management consultant by GLG Partners, to advise on geopolitical risk as well as current structural issues in economic behaviour relating to investment decisions. GLG is a UK-based hedge fund management firm headed by Noam Gottesman. Ferguson was also an adviser to Morgan Stanley, the investment bank. In 2011, he set up Greenmantle LLC, an advisory business specializing in macroeconomics and geopolitics. He also serves as a non-executive director on the board of Affiliated Managers Group | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Ferguson was an advisor to John McCain's US presidential campaign in 2008, supported Mitt Romney in 2012 and was a vocal critic of Barack Obama. Ferguson is a trustee of the New York Historical Society and the London-based Centre for Policy Studies. Ferguson has written regularly for British newspapers and magazines since the mid 1980s. At that time, he was lead writer for "The Daily Telegraph," and a regular book reviewer for "The Daily Mail". In the summer on 1989, while travelling in Berlin, he wrote an article for a British newspaper with the provisional headline “The Berlin Wall is Crumbling,” but it was not published. In the early 2000s he wrote a weekly column for "The Sunday Telegraph" and Los Angeles Times, leaving in 2007 to become a contributing editor to the "Financial Times". Between 2008 and 2012 he wrote regularly for "Newsweek". Since 2015 he has written a weekly column for The Sunday Times and The Boston Globe, which also appears in numerous papers around the world. Ferguson's television series The Ascent of Money won the 2009 International Emmy award for Best Documentary. In 2011 his film company Chimerica Media released its first feature-length documentary, "Kissinger", which won the New York Film Festival's prize for Best Documentary. In May 2012, the BBC announced was to present its annual Reith Lectures – a prestigious series of radio lectures which were first broadcast in 1948 | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson These four lectures, titled "The Rule of Law and its Enemies", examine the role man-made institutions have played in the economic and political spheres. In the first lecture, held at the London School of Economics, titled "The Human Hive", Ferguson argues for greater openness from governments, saying they should publish accounts which clearly state all assets and liabilities. Governments, he said, should also follow the lead of business and adopt the Generally Accepted Accounting Principles and, above all, generational accounts should be prepared on a regular basis to make absolutely clear the inter-generational implications of current fiscal policy. In the lecture, Ferguson says young voters should be more supportive of government austerity measures if they do not wish to pay further down the line for the profligacy of the baby boomer generation. In the second lecture, "The Darwinian Economy", Ferguson reflects on the causes of the global financial crisis, and erroneous conclusions that many people have drawn from it about the role of regulation, and asks whether regulation is in fact "the disease of which it purports to be the cure". "The Landscape of Law" was the third lecture, delivered at Gresham College. It examines the rule of law in comparative terms, asking how far the common law's claims to superiority over other systems are credible, and whether we are living through a time of 'creeping legal degeneration' in the English-speaking world | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson The fourth and final lecture, "Civil and Uncivil Societies", focuses on institutions (outside the political, economic and legal realms) designed to preserve and transmit particular knowledge and values. Ferguson asks whether the modern state is quietly killing civil society in the Western world, and what non-Western societies can do to build a vibrant civil society. The first lecture was broadcast on BBC Radio 4 and the BBC World Service on Tuesday, 19 June 2012. The series is available as a BBC podcast. In his 2001 book, "The Cash Nexus", which he wrote following a year as Houblon-Norman Fellow at the Bank of England, Ferguson argues that the popular saying, "money makes the world go 'round", is wrong; instead he presented a case for human actions in history motivated by far more than just economic concerns. In his books "Colossus" and "Empire", Ferguson presents a reinterpretation of the history of the British Empire and in conclusion proposes that the modern policies of the United Kingdom and the United States, in taking a more active role in resolving conflict arising from the failure of states, are analogous to the "Anglicization" policies adopted by the British Empire throughout the 19th century. In "Colossus", Ferguson explores the United States' hegemony in foreign affairs and its future role in the world | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson The American writer Michael Lind, responding to Ferguson's advocation of an enlarged American military through conscription, accused Ferguson of engaging in apocalyptic alarmism about the possibility of a world without the United States as the dominant power and of a casual disregard for the value of human life. In "War of the World", published in 2006, Ferguson argued that a combination of economic volatility, decaying empires, psychopathic dictators, racially/ethnically motivated and institutionalised violence resulted in the wars and genocides of what he calls "History's Age of Hatred". "The New York Times Book Review" named "War of the World" one of the 100 Notable Books of the Year in 2006, while the "International Herald Tribune" called it "one of the most intriguing attempts by an historian to explain man's inhumanity to man". Ferguson addresses the paradox that, though the 20th century was "so bloody", it was also "a time of unparalleled [economic] progress". As with his earlier work "Empire", "War of the World" was accompanied by a Channel 4 television series presented by Ferguson. Published in 2008, "The Ascent of Money" examines the history of money, credit, and banking. In it Ferguson predicts a financial crisis as a result of the world economy and in particular the United States using too much credit. He cites the China–United States dynamic which he refers to as Chimerica where an Asian "savings glut" helped create the subprime mortgage crisis with an influx of easy money | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson While researching this book, in early 2007, Ferguson attended a session at a conference in Las Vegas at which a hedge fund manager stated there would never be another recession. Ferguson challenged this, and later the two agreed on a $14,000, 7 to 1 bet, that there would be a recession within five years. Ferguson collected $98,000. Published in 2011, "Civilization: The West and the Rest" examines what Ferguson calls the most "interesting question" of our day: "Why, beginning around 1500, did a few small polities on the western end of the Eurasian landmass come to dominate the rest of the world?" The "Economist" in a review wrote: Mr Ferguson starts with the overwhelming success of European civilisation. In 1500 Europe's future imperial powers controlled 10% of the world's territories and generated just over 40% of its wealth. By 1913, at the height of empire, the West controlled almost 60% of the territories, which together generated almost 80% of the wealth. This stunning fact is lost, he regrets, on a generation that has supplanted history's sweep with a feeble-minded relativism that holds "all civilisations as somehow equal". Ferguson attributes this divergence to the West's development of six "killer apps", which he claims are largely missing elsewhere in the world – "competition, science, the rule of law, medicine, consumerism and the work ethic". Ferguson compared and contrasted how the West's "killer apps" allowed the West to triumph over "the Rest" | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Thus, Ferguson argued the rowdy and savage competition between European merchants created far more wealth than did the static and ordered society of Qing China; that the tolerance extended to thinkers like Sir Isaac Newton in Stuart England had no counterpart in the Ottoman Empire where Takiyuddin's "blasphemous" observatory was demolished for contradicting the teachings of Islam which ensured that Western civilization was capable of making scientific advances that Islamic civilization never could; and because respect for private property was far stronger in British America than it ever was in Spanish America, which led to the United States and Canada becoming prosperous societies while Latin America was and remains mired in poverty. However, Ferguson also argued that the modern West had lost its edge and the future belongs to the nations of Asia, especially China, which has adopted the West's "killer apps". Ferguson argues that in the coming years will see a steady decline of the West and China and the rest of the Asian nations will be the rising powers. A related documentary "" was broadcast as a six-part series on Channel 4 in March and April 2011. "Kissinger The Idealist", Volume I, published in September 2015, is the first part of a planned two-part biography of Henry Kissinger based on his private papers. The book starts with a quote from a letter which Kissinger wrote in 1972 | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson The book examines Kissinger's life from being a refugee and fleeing Germany in 1938, to serving in the US army as a "free man" in World War II, to studying at Harvard. The book also explores the history of Kissinger joining the Kennedy administration and later becoming critical of its foreign policy, to supporting Nelson Rockefeller on three failed presidential bids, to finally joining the Nixon administration. The book also includes Kissinger's early evaluation of the Vietnam war and his efforts to negotiate with the North Vietnamese in Paris. "The Economist" wrote in a review about "The Idealist": "Mr Ferguson, a British historian also at Harvard, has in the past sometimes produced work that is rushed and uneven. Not here. Like Mr Kissinger or loathe him, this is a work of engrossing scholarship." In a negative review of "The Idealist", the American journalist Michael O'Donnell questioned Ferguson's interpretation of Kissinger's actions leading up to Nixon's election as President. Andrew Roberts praised the book in The New York Times, concluding: "already has many important, scholarly and controversial books to his credit. But if the second volume of 'Kissinger' is anywhere near as comprehensive, well written and riveting as the first, this will be his masterpiece." Ferguson proposed a modified version of group selection that history can be explained by the evolution of human networks. He wrote, "Man, with his unrivaled neural network, was born "to" network | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson " The title refers to a transition from hierarchical, "tower" networks to flatter, "square" network connections between individuals. John Gray in a review of the book was not convinced. He wrote, "He offers a mix of metaphor and what purports to be a new science." "has again written a brilliant book," wrote Deirdre McCloskey in The Wall Street Journal, "this time in defence of traditional top-down principles of governing the wild market and the wilder international order. "The Square and the Tower" raises the question of just how much the unruly world should be governed—and by whom. Not everyone will agree, but everyone will be charmed and educated. … 'The Square and the Tower' is always readable, intelligent, original. You can swallow a chapter a night before sleep and your dreams will overflow with scenes of Stendhal's 'The Red and the Black,' Napoleon, Kissinger. In 400 pages you will have restocked your mind. Do it." In 1998, Ferguson published "The Pity of War: Explaining World War One", which with the help of research assistants he was able to write in just five months. This is an analytic account of what Ferguson considered to be the ten great myths of the Great War. The book generated much controversy, particularly Ferguson's suggestion that it might have proved more beneficial for Europe if Britain had stayed out of the First World War in 1914, thereby allowing Germany to win. Ferguson has argued that the British decision to intervene was what stopped a German victory in 1914–15 | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Furthermore, Ferguson expressed disagreement with the "Sonderweg" interpretation of German history championed by some German historians such as Fritz Fischer, Hans-Ulrich Wehler, Hans Mommsen and Wolfgang Mommsen, who argued that the German Empire deliberately started an aggressive war in 1914. Likewise, Ferguson has often attacked the work of the German historian Michael Stürmer, who argued that it was Germany's geographical situation in Central Europe that determined the course of German history. On the contrary, Ferguson maintained that Germany waged a preventive war in 1914, a war largely forced on the Germans by reckless and irresponsible British diplomacy. In particular, Ferguson accused the British Foreign Secretary Sir Edward Grey of maintaining an ambiguous attitude to the question of whether Britain would enter the war or not, and thus confusing Berlin over just what was the British attitude towards the question of intervention in the war. Ferguson accused London of unnecessarily allowing a regional war in Europe to escalate into a world war. Moreover, Ferguson denied that the origins of National Socialism could be traced back to Imperial Germany; instead Ferguson asserted the origins of Nazism could only be traced back to the First World War and its aftermath. Ferguson attacked a number of ideas that he called "myths" in the book | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson They are listed here (with his counter-arguments in parentheses): Another controversial aspect of "The Pity of War" is Ferguson's use of counterfactual history also known as "speculative" or "hypothetical" history. In the book, Ferguson presents a hypothetical version of Europe being, under Imperial German domination, a peaceful, prosperous, democratic continent, without ideologies like communism or fascism. In Ferguson's view, had Germany won World War I, then the lives of millions would have been saved, something like the European Union would have been founded in 1914, and Britain would have remained an empire as well as the world's dominant financial power. The French historians Stéphane Audoin-Rouzeau and Annette Becker were dubious about much of Ferguson's methodology and conclusions in "The Pity of War", but praised him for the chapter dealing with the executions of POWs, arguing that Ferguson had exposed a dark side of the war that until then had been ignored. The American writer Michael Lind wrote about "The Pity of War":Like the historian John Charmley, who expressed the same wish in the case of World War II, Ferguson belongs to the fringe element of British conservatism that regrets the absence of a German-British deal in the first half of the 20th century that would have marginalized the United States and might have allowed the British Empire to survive to this day | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson According to Ferguson, Britain should have stayed out of World War I and allowed Imperial Germany to smash France and Russia and create a continental empire from the Atlantic to the Middle East. The joke is on Ferguson's American conservative admirers, inasmuch as he laments the defeat of the Kaiser's Germany because it accelerated the replacement of the British Empire by the United States of America and the eclipse of the City of London by Wall Street. The American historian Gerhard Weinberg in a review of "The Pity of War" strongly criticized Ferguson for advancing the thesis that it was idiotic for Britain to have fought a Germany that posed no danger. Weinberg accused Ferguson of completely ignoring the chief foreign policy aim of Wilhelm II from 1897 onwards, namely "Weltpolitik" ("World Politics") and argued it was absurd for Ferguson to claim that allowing Germany to defeat France and Russia would have posed no danger to Britain. Weinberg wrote that Ferguson was wrong to claim that Germany's interests were limited only to Europe, and maintained that if the "Reich" did defeat France in 1914, then Germany would have taken over the French colonies in Asia and Africa which would have definitely affected the balance of power all over the world, not just in Europe | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Finally, Weinberg attacked Ferguson for claiming that the Tirpitz Plan was not a danger to Britain and that Britain had no reason to fear Germany's naval ambitions, sarcastically asking if that was really the case, then why did the British redeploy so much of their fleet from around the world to the North Sea and spend so much money building warships in the Anglo-German naval arms race? Weinberg accused Ferguson of distorting both German and British history and ignoring any evidence that did not fit with his thesis that Britain should never have fought Germany, stating that "The Pity of War" was interesting as a historical provocation, but was not persuasive as history. Ferguson wrote two volumes about the prominent Rothschild family: "The House of Rothschild: Volume 1: Money's Prophets: 1798–1848" and "The House of Rothschild: Volume 2: The World's Banker: 1849–1999". These books were the result of original archival research. The books won the Wadsworth Prize for Business History and were also short-listed for the Jewish Quarterly-Wingate Literary Award and the American National Jewish Book Award. The books were widely acclaimed by some historians, although they did receive some criticism. John Lewis Gaddis, a Cold War–era historian, praised Ferguson's "unrivaled range, productivity and visibility", while criticising the book as unpersuasive and containing contradictory claims. Marxist historian Eric Hobsbawm had praised Ferguson as an excellent historian, but criticised him as a "nostalgist for empire" | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson In a mixed review of a later book by Ferguson, "The War of the World: History's Age of Hatred", a reviewer for "The Economist" described how many regard Ferguson's two books on the Rothschilds "as one of the finest studies of its kind." Writing in The New York Review of Books, Robert Skidelsky praised Ferguson: "Taken together, Ferguson's two volumes are a stupendous achievement, a triumph of historical research and imagination. No serious historian can write about the connection between the politics, diplomacy, and economics of the nineteenth century in the same way again. And, as any good work of history should do, it constantly prompts us to ask questions about our own age, when once again we have embarked on the grand experiment of a world economy without a world government." Ferguson sometimes champions counterfactual history, also known as "speculative" or "hypothetical" history, and edited a collection of essays, titled "Virtual History: Alternatives and Counterfactuals" (1997), exploring the subject. Ferguson likes to imagine alternative outcomes as a way of stressing the contingent aspects of history. For Ferguson, great forces don't make history; individuals do, and nothing is predetermined. Thus, for Ferguson, there are no paths in history that will determine how things will work out. The world is neither progressing nor regressing; only the actions of individuals determine whether we will live in a better or worse world. His championing of the method has been controversial within the field | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson In a 2011 review of Ferguson's book "Civilization: The West and the Rest", Noel Malcolm (Senior Research Fellow in History at All Souls College at Oxford University) stated that: "Students may find this an intriguing introduction to a wide range of human history; but they will get an odd idea of how historical argument is to be conducted, if they learn it from this book." In 2003, former U.S. Secretary of State Henry Kissinger provided Ferguson with access to his White House diaries, letters, and archives for what Ferguson calls a "warts-and-all biography" of Kissinger. In 2015, he published the first volume in a two-part biography titled "Kissinger: 1923–1968: The Idealist" from Penguin Press. The thesis of this first volume was that Kissinger was very much influenced in his academic and political development by the philosopher Immanuel Kant, and especially by an interpretation of Kant that he learned from a mentor at Harvard University, William Yandell Elliott. Ferguson has defended the British Empire, many historians and commentators have considered his views both "audacious" and "wrong", "informative", "ambitious" and "troubling". Ferguson is critical of what he calls the "self-flagellation" that he says characterises modern European thought | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson In the related TV documentary of 2003, "Empire", which professor Dr Jon Wilson of the Department of History at KCL described as "false and dangerous" apologia, Ferguson argued that the mantle of the British Empire as the world's foremost power was passed on to the United States during the Second World War, which led to Ferguson favorably reciting Rudyard Kipling's poem "The White Man's Burden"—written in 1898 to praise the United States for becoming an imperial power by conquering the Philippines from Spain—as just as relevant today as it was in 1898. Ferguson argues that the United States should celebrate being an imperial power comparable to Britain, conquering other people's countries for what Ferguson insists is their own good, and complains that far too often Americans refuse to accept that nation has an imperialist role to play in the modern world. Richard Drayton, Rhodes Professor of Imperial History at King's College London, has stated that it was correct of Seumas Milne to associate "Ferguson with an attempt to "rehabilitate empire" in the service of contemporary great power interests". Bernard Porter attacked "Empire" in "The London Review of Books" as a "panegyric to British colonialism". Ferguson, in response to this, drew Porter's attention to the conclusion of the book, where he writes: "No one would claim that the record of the British Empire was unblemished | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson On the contrary, I have tried to show how often it failed to live up to its own ideal of individual liberty, particularly in the early era of enslavement, transportation and the 'ethnic cleansing' of indigenous peoples." Ferguson argues however that the British Empire was preferable to the alternatives: The 19th-century empire undeniably pioneered free trade, free capital movements and, with the abolition of slavery, free labour. It invested immense sums in developing a global network of modern communications. It spread and enforced the rule of law over vast areas. Though it fought many small wars, the empire maintained a global peace unmatched before or since. In the 20th century too the empire more than justified its own existence. For the alternatives to British rule represented by the German and Japanese empires were clearly – and they admitted it themselves – far worse. And without its empire, it is inconceivable that Britain could have withstood them. In November 2011 Pankaj Mishra reviewed "Civilisation: The West and the Rest" unfavourably in the "London Review of Books". Ferguson demanded an apology and threatened to sue Mishra on charges of libel due to allegations of racism | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Matthew Carr wrote in "Race & Class" that "Niall Ferguson, the conservative English [sic] historian and enthusiastic advocate of a new American empire, has also embraced the Eurabian idea in a widely reproduced article entitled 'Eurabia?', in which he laments the 'de-Christianization of Europe' and the secularism of the continent that leaves it 'weak in the face of fanaticism'." Carr adds that "Ferguson sees the recent establishment of a department of Islamic studies in his (Oxford college) as another symptom of 'the creeping Islamicization of a decadent Christendom'," and in a 2004 lecture at the American Enterprise Institute entitled 'The End of Europe?', Ferguson struck a similarly Spenglerian note, conjuring the term 'impire' to depict a process in which a 'political entity, instead of expanding outwards towards its periphery, exporting power, implodes – when the energies come from outside into that entity'. In Ferguson's opinion, this process was already under way in a decadent 'post-Christian' Europe that was drifting inexorably towards the dark denouement of a vanquished civilisation and the fatal embrace of Islam. In 2015, Ferguson deplored the Paris attacks committed by Islamic State terrorists, but stated he was not going to "stand" with the French as he argued that France was a lost cause, a declining state faced with an unstoppable Islamic wave that would sweep away everything that tried to oppose it | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Ferguson compared the modern European Union to the Western Roman Empire, describing modern Europe as not that different from the world depicted by Edward Gibbon in his book "The Decline and Fall of the Roman Empire". Ferguson wrote that:Uncannily similar processes are destroying the European Union today...Let us be clear about what is happening. Like the Roman Empire in the early fifth century, Europe has allowed its defenses to crumble. As its wealth has grown, so its military prowess has shrunk, along with its self-belief. It has grown decadent in its shopping malls and sports stadiums. At the same time, it has opened its gates to outsiders who have coveted its wealth without renouncing their ancestral faith. Ferguson wrote the mass influx of refugees into Europe from Syria was a modern version of the "Völkerwanderung" when the Huns burst out of Asia and invaded Europe, causing millions of the Germanic peoples to flee into the presumed safety of the Roman Empire, smashing their way in as the Romans attempted unsuccessfully to stop the Germans from entering the empire. Ferguson writes that Gibbon was wrong to claim the Roman Empire collapsed slowly and argues that the view among a growing number of modern scholars is that the collapse of the Roman empire was swift and violent; unforeseeable by Romans of the day, just as the collapse of modern European civilization would likewise be for modern Europeans | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Ferguson supported the 2003 Iraq War, and he is on record as being not necessarily opposed to future western incursions around the world. It's all very well for us to sit here in the West with our high incomes and cushy lives, and say it's immoral to violate the sovereignty of another state. But if the effect of that is to bring people in that country economic and political freedom, to raise their standard of living, to increase their life expectancy, then don't rule it out. On the rise of Republican Party presidential candidate Donald Trump, Ferguson was quoted in early 2016: "If you bother to read some of the serious analysis of Trump's support, you realize that it's a very fragile thing and highly unlikely to deliver what he needs in the crucial first phase of the primaries ... By the time we get to March–April, it's all over. I think there's going to be a wonderful catharsis, I'm really looking forward to it: Trump's humiliation. Bring it on." Trump eventually won the nomination. Three weeks before the 2016 United States presidential election, Ferguson said in an interview that it "was over for Donald Trump"; that "Trump had flamed out in all three Presidential debates"; that, "I don't think there can be any last minute surprise to rescue him [Trump]"; that there was no hope of Donald Trump winning Independent voters and that Trump was "gone as a candidate", adding that "it seems to me clear that she [Hillary Clinton] is going to be the first female President of the United States | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson The only question is how bad does his [Trump's] flaming out affect candidates for the Senate, candidates for the House, further down on the ballot." However after Brexit, Ferguson stated that Trump could win via the Electoral College if certain demographics turned out to vote in key swing states. Trump was elected president and the Republican Party retained control of the Senate. In an article from November 2016 in "The Boston Globe", Ferguson advised that Trump should support the efforts of Prime Minister Theresa May to have Britain leave the European Union as the best way of breaking up the EU, and sign a free trade agreement with the United Kingdom once Brexit is complete. Ferguson advised that Trump should give recognition to Russia as a Great Power, and work with President Vladimir Putin by giving Russia a sphere of influence in Eurasia. In the same column, Ferguson advised Trump not to engage in a trade war with China, and work with President Xi Jinping to create a US-Chinese partnership. Ferguson argued that Trump and Putin should work for the victory of Marine Le Pen (who wants France to leave the EU) and the "Front national" in the 2017 French elections, arguing that Le Pen was the French politician most congenial to the Trump administration. Ferguson argued that a quintumvirate of Trump, Putin, Xi, May and Le Pen was the world's best hope for peace and prosperity. In its edition of 15 August 2005, "The New Republic" published "The New New Deal", an essay by Ferguson and Laurence J | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Kotlikoff, a professor of economics at Boston University. The two scholars called for the following changes to the American government's fiscal and income security policies: In November 2012, Ferguson stated in a video with CNN that the U.S. has enough energy resources to move towards energy independence and could possibly enter a new economic golden age due to the related socio-economic growth—coming out of the post-world economic recession doldrums. Ferguson was an attendee of the 2012 Bilderberg Group meeting, where he was a speaker on economic policy. Ferguson was highly critical of Britain's vote to leave the European Union, warning that "the economic consequences will be dire". Later, after backing the Remain campaign during the referendum, Ferguson changed his mind and came out in support of Britain's exit from the EU. In May 2009, Ferguson became involved in a high-profile exchange of views with economist Paul Krugman arising out of a panel discussion hosted by PEN/"New York Review" on 30 April 2009, regarding the U.S. economy. Ferguson contended that the Obama administration's policies are simultaneously Keynesian and monetarist, in an "incoherent" mix, and specifically claimed that the government's issuance of a multitude of new bonds would cause an increase in interest rates. Krugman argued that Ferguson's view is "resurrecting 75-year old fallacies" and full of "basic errors" | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson He also stated that Ferguson is a "poseur" who "hasn't bothered to understand the basics, relying on snide comments and surface cleverness to convey the impression of wisdom. It's all style, no comprehension of substance." In 2012, Jonathan Portes, the director of the National Institute of Economic and Social Research, said that subsequent events had shown Ferguson to be wrong: "As we all know, since then both the US and UK have had deficits running at historically extremely high levels, and long-term interest rates at historic lows: as Krugman has repeatedly pointed out, the (IS-LM) textbook has been spot on." Later in 2012, after Ferguson wrote a cover story for "Newsweek" arguing that Mitt Romney should be elected in the upcoming US presidential election, Krugman wrote that there were multiple errors and misrepresentations in the story, concluding "We're not talking about ideology or even economic analysis here – just a plain misrepresentation of the facts, with an august publication letting itself be used to misinform readers. The "Times" would require an abject correction if something like that slipped through. Will "Newsweek"?" Ferguson denied that he had misrepresented the facts in an online rebuttal. Matthew O'Brien countered that Ferguson was still distorting the meaning of the Congressional Budget Office report being discussed, and that the entire piece could be read as an effort to deceive | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson In 2013, Ferguson, naming Dean Baker, Josh Barro, Brad DeLong, Matthew O'Brien, Noah Smith, Matthew Yglesias and Justin Wolfers, attacked "Krugman and his acolytes," in his three-part essay on why he dislikes Paul Krugman. The essay title ('Krugtron the Invincible') originally comes from a post by Noah Smith. At a May 2013 investment conference in Carlsbad, California, Ferguson was asked about his views on economist John Maynard Keynes' quotation that "in the long run we are all dead." Ferguson stated that Keynes was indifferent to the future because he was gay and did not have children. The remarks were widely criticised for being offensive, factually inaccurate, and a distortion of Keynes' ideas. Ferguson posted an apology for these statements shortly after reports of his words were widely disseminated, saying his comments were "as stupid as they were insensitive". In the apology, Ferguson stated: "My disagreements with Keynes's economic philosophy have never had anything to do with his sexual orientation. It is simply false to suggest, as I did, that his approach to economic policy was inspired by any aspect of his personal life." In Spring of 2018, Professor Ferguson was involved with College Republican leaders at Stanford to oppose a Left-leaning student take over of the Cardinal Conversations initiative. In leaked emails, he was quoted as asking for opposition research on the student involved | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson He later apologized and resigned from the said initiative when emails were leaked revealing his involvement in the events. "I very much regret the publication of these emails. I also regret having written them," Ferguson wrote in a statement to The Daily. Ferguson was an early skeptic of cryptocurrencies, famously dismissing his teenage son’s recommendation to buy Bitcoin in 2014. By 2017, he’d changed his mind on Bitcoin’s utility, saying it had established itself as a form of “digital gold: a store of value for wealthy investors, especially those located in countries with weak rule of law and high political risk.” In February 2019, Ferguson became an advisor for digital asset protocol firm Ampleforth Protocol, saying he was attracted by the firm’s plan to “reinvent money in a way that protects individual freedom and to create a payments system that treats everyone equally.” In March 2019, Ferguson spoke at an Australian Financial Review Business Summit, where he admitted to being “wrong to think there was no … use for a form of currency based on blockchain technology… I don’t think this will turn out to be a complete delusion." Ferguson married journalist Susan Douglas, whom he met in 1987 when she was his editor at "The Sunday Times". They have three children: Felix, Freya, and Lachlan. In February 2010, news media reported that Ferguson had separated from Douglas and started dating former Dutch MP Ayaan Hirsi Ali. Ferguson and Douglas divorced in 2011 | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson Ferguson married Hirsi Ali on 10 September 2011 and Hirsi Ali gave birth to their son Thomas in December 2011. In an interview in April 2011, Ferguson complained about the media coverage of his relationship with Ali, stating: "No, I never read their shitty coverage of people's private lives. I don't care about the sex lives of celebrities, so I was a little unprepared for having my private life all over the country. So yeah, I was naive, yeah. Because you have to stoop to conquer," – but will never write for The Daily Mail again. "That's because I'm a vendetta person. Yes, absolutely. Implacable." Ferguson dedicated his book "Civilization" to "Ayaan". In an interview with "The Guardian", Ferguson spoke about his love for Ali, who, he writes in the preface, "understands better than anyone I know what Western civilisation really means – and what it still has to offer the world". Ferguson's self confessed workaholism has placed strains on his personal relations in the past. Ferguson has commented that: ...from 2002, the combination of making TV programmes and teaching at Harvard took me away from my children too much. You don't get those years back. You have to ask yourself: "Was it a smart decision to do those things?" I think the success I have enjoyed since then has been bought at a significant price. In hindsight, there would have been a bunch of things that I would have said no to | https://en.wikipedia.org/wiki?curid=697242 |
Niall Ferguson In an interview, Ferguson described his relationship with the left: "No, they love being provoked by me! Honestly, it makes them feel so much better about their lives to think that I'm a reactionary; it's a substitute for thought. 'Imperialist scumbag' and all that. Oh dear, we're back in a 1980s student union debate." Ferguson was the inspiration for Alan Bennett's play "The History Boys" (2004), particularly the character of Irwin, a history teacher who urges his pupils to find a counterintuitive angle, and goes on to become a television historian. Bennett's character "Irwin", writes David Smith of "The Observer", gives the impression that "an entire career can be built on the trick of contrariness." In 2018 Ferguson naturalised as a United States citizen. | https://en.wikipedia.org/wiki?curid=697242 |
Abnormal profit In economics, abnormal profit, also called excess profit, supernormal profit or pure profit, is "profit of a firm over and above what provides its owners with a normal (market equilibrium) return to capital." Normal profit (return) in turn is defined as opportunity cost of the owner's resources. A related broader term is economic rent, which applies to the owner of a resource, such as land, rather than to the firm as such. According to the theoretical model of perfect competition, abnormal profits are unsustainable because they stimulate new supply, which forces down prices and eliminates the abnormal profit. persists in the long run in imperfectly competitive markets where firms successfully block the entry of new firms. is usually generated by an oligopoly or a monopoly; however, firms often try to hide this fact, both from the market and government, in order to reduce the chance of competition, or government intervention in the form of an antitrust investigation. In principle, there are three kinds of abnormal profit: Business writer Michael Porter and Anita M. McGahan undertook an empirical study of the "emergence and sustainability of abnormal profits" in 2003, in which they concluded that both industry structure and firm performance were determinants of whether abnormal profits could be sustained by firms. | https://en.wikipedia.org/wiki?curid=703105 |
Black budget A black budget is a government budget that is allocated for classified or other secret operations of a nation. The black budget is an account expenses and spending related to military research and covert operations. The black budget is mostly classified due to security reasons. The black budget can be complicated to calculate, but in the United States it has been estimated to be over US$50 billion a year. The United States Department of Defense has a black budget it uses to fund black projects—expenditures that it does not want to disclose publicly. The annual cost of the United States Department of Defense black budget was estimated at $30 billion in 2008, but was increased to an estimated $50 billion in 2009. A black budget article by "The Washington Post", based on information given by Edward Snowden, detailed how the US allocated $52.8 billion in 2012 for the black budget. The black budget has been known to hide multiple types of projects from elected officials. With secret code names and hidden figures, the details of the black budget are revealed only to certain people of congress, if at all. This budget was approved by the US National Security Act of 1947, which created the Central Intelligence Agency, the National Security Council and reorganized some military bases with help of the Defense Department. The U.S. Government claims that the money given to this budget investigates advanced sciences and technologies for military issues | https://en.wikipedia.org/wiki?curid=704368 |
Black budget This kind of research is responsible for the creation of new aircraft, weapons, and satellites. In 2018, some newspapers reported that the Trump administration asked for $81.1 billion for the 2019 black budget. The request included $59.9 billion for the National Intelligence Program, covering non-military programs and activities. Also $21.2 billion for the Military Intelligence Program which covers Intelligence activities by the Department of Defense. “In total, these two are more than 3.4% higher than the FY2018 request and the largest since then... [and it's] the largest announced since the government began disclosing its intelligence budget request in 2007..." according to "The Washington Times" Andrew Blake. According to an estimate by the Moscow-based , about 21% (3.2 trillion rubles) of the Russian federal budget was "black" (not itemized) in 2015. This represents a doubling from 2010. The increase coincided with huge increases in the Russian military budget under Russian President Vladimir Putin. | https://en.wikipedia.org/wiki?curid=704368 |
Bracket creep is usually defined as the process by which inflation pushes wages and salaries into higher tax brackets, leading to fiscal drag. However, even if there is only one tax bracket, or one remains within the same tax bracket, there will still be bracket creep resulting in a higher proportion of income being paid in tax. That is, although the marginal tax rate remains unchanged with inflation, the average tax rate will increase. Most progressive tax systems are not adjusted for inflation. As wages and salaries rise in nominal terms under the influence of inflation they become more highly taxed, even though in real terms the value of the wages and salaries has not increased at all. The net effect is that in real terms taxes rise unless the tax rates or brackets are adjusted to compensate. Suppose a person earns $20,000 per year and is liable to 20% tax on earnings above a threshold of $5,000 per year. Then they pay ($20,000–$5,000)*0.2 = $3,000 in taxes, or 15% of their income. Now suppose that due to inflation, their wage goes up by 5%, but the government only increases the tax threshold by 2%. They must now pay ($21,000–$5,100)*0.2 = $3,180 or 15.14% of their income as tax. Thus the proportion of the person's income that is paid as tax has increased. Note that in this example, the average tax rate went up even though the tax payer remained in the 20% tax bracket. That is, the marginal tax rate did not change | https://en.wikipedia.org/wiki?curid=709199 |
Bracket creep The Alternative Minimum Tax originally (1971) targeted 155 high-income households; based on 2004 law, it would affect 20% of households by 2010. Nominal bracket creep can easily be countered by a system of index-linked tax brackets, but this may be politically undesirable. Many voters do not perceive the effects of bracket creep, and so the government may prefer to adjust tax brackets manually once every few years: in effect, restoring the real tax rates to their approximate pre-inflation levels but in a way that gives the government the appearance that they are cutting taxes. Not surprisingly, such changes are usually made right before a general election is to be held. | https://en.wikipedia.org/wiki?curid=709199 |
Corporation (feudal Europe) In feudal Europe, a corporation (from the Latin , a body) was an aggregation of business interests into a single legal body, entity or compact, usually with an explicit license from city, church, or national leaders. These functioned as effective monopolies for a particular good or labor. The term "corporation" was used as late as the 18th century in England to refer to such ventures as the East India Company or the Hudson's Bay Company: commercial organizations that operated under royal patent to have exclusive rights to a particular area of trade. In the medieval town, however, corporations were a conglomeration of interests that existed either as a development from, or in competition with, guilds. The most notable corporations were in trade and banking. The effects of a corporation were similar to a monopoly. On the one hand, the ability to have sole access to markets meant that the business was encouraged (e.g., the ability to be an exclusive trader provided an incentive to the East India Company to accept financial risks in exploration) and the negative effects of competition were avoided (to take the same example, exclusive patents cut down on merchants sponsoring piracy). Innovation was stifled, however, and prices were unregulated. (In the case of patent corporations, the town or monarch was ostensibly able to regulate prices by revoking the patent, but this rarely occurred.) | https://en.wikipedia.org/wiki?curid=712560 |
Rational pricing is the assumption in financial economics that asset prices (and hence asset pricing models) will reflect the arbitrage-free price of the asset as any deviation from this price will be "arbitraged away". This assumption is useful in pricing fixed income securities, particularly bonds, and is fundamental to the pricing of derivative instruments. Arbitrage is the practice of taking advantage of a state of imbalance between two (or possibly more) markets. Where this mismatch can be exploited (i.e. after transaction costs, storage costs, transport costs, dividends etc.) the arbitrageur can "lock in" a risk-free profit by purchasing and selling simultaneously in both markets. In general, arbitrage ensures that "the law of one price" will hold; arbitrage also equalises the prices of assets with identical cash flows, and sets the price of assets with known future cash flows. The same asset must trade at the same price on all markets ("the law of one price"). Where this is not true, the arbitrageur will: Two assets with identical cash flows must trade at the same price. Where this is not true, the arbitrageur will: An asset with a known price in the future must today trade at that price discounted at the risk free rate. Note that this condition can be viewed as an application of the above, where the two assets in question are the asset to be delivered and the risk free asset | https://en.wikipedia.org/wiki?curid=716969 |
Rational pricing (a) where the discounted future price is "higher" than today's price: (b) where the discounted future price is "lower" than today's price: Point (b) is only possible for those holding the asset but not needing it until the future date. There may be few such parties if short-term demand exceeds supply, leading to backwardation. is one approach used in pricing fixed rate bonds. Here, each cash flow can be matched by trading in (a) some multiple of a zero-coupon bond corresponding to the coupon date, and of equivalent credit worthiness (if possible, from the same issuer as the bond being valued) with the corresponding maturity, or (b) in a corresponding strip and ZCB. Then, given that the cash flows can be replicated, the price of the bond must today equal the sum of each of its cash flows discounted at the same rate as each ZCB (per #Assets with identical cash flows). Were this not the case, arbitrage would be possible and would bring the price back into line with the price based on ZCBs. The mechanics are as follows. Where the price of the bond is misaligned with the present value of the ZCBs, the arbitrageur could: The pricing formula is then formula_1, where each cash flow formula_2 is discounted at the rate formula_3 that matches the coupon date. Often, the formula is expressed as formula_4, using prices instead of rates, as prices are more readily available. A derivative is an instrument that allows for buying and selling of the same asset on two markets – the spot market and the derivatives market | https://en.wikipedia.org/wiki?curid=716969 |
Rational pricing Mathematical finance assumes that any imbalance between the two markets will be arbitraged away. Thus, in a correctly priced derivative contract, the derivative price, the strike price (or reference rate), and the spot price will be related such that arbitrage is not possible. See Fundamental theorem of arbitrage-free pricing. In a futures contract, for no arbitrage to be possible, the price paid on delivery (the forward price) must be the same as the cost (including interest) of buying and storing the asset. In other words, the rational forward price represents the expected future value of the underlying discounted at the risk free rate (the "asset with a known future-price", as above); see Spot–future parity. Thus, for a simple, non-dividend paying asset, the value of the future/forward, formula_5, will be found by accumulating the present value formula_6 at time formula_7 to maturity formula_8 by the rate of risk-free return formula_9. This relationship may be modified for storage costs, dividends, dividend yields, and convenience yields; see futures contract pricing. Any deviation from this equality allows for arbitrage as follows. underpins the logic of swap valuation. Here, two counterparties "swap" obligations, effectively exchanging cash flow streams calculated against a notional principal amount, and the value of the swap is the present value (PV) of both sets of future cash flows "netted off" against each other | https://en.wikipedia.org/wiki?curid=716969 |
Rational pricing To be arbitrage free, the terms of a swap contract are such that, initially, the "Net" present value of these future cash flows is equal to zero; see Swap (finance) #Valuation and Pricing. Once traded, swaps can (must) also be priced using rational pricing. The examples below are for Interest rate swaps - and is representative of pure rational pricing as it excludes credit risk - although the principle applies to . Consider a fixed-to-floating Interest rate swap where Party A pays a fixed rate ("Swap rate") , and Party B pays a floating rate. Here, the "fixed rate" would be such that the present value of future fixed rate payments by Party A is equal to the present value of the "expected" future floating rate payments (i.e. the NPV is zero). Were this not the case, an arbitrageur, C, could: The Floating leg of an interest rate swap can be "decomposed" into a series of forward rate agreements. Here, since the swap has identical payments to the FRA, arbitrage free pricing must apply as above – i.e. the value of this leg is equal to the value of the corresponding FRAs. Similarly, the "receive-fixed" leg of a swap can be valued by comparison to a bond with the same schedule of payments. (Relatedly, given that their underlyings have the same cash flows, bond options and swaptions are equatable.) See Swap (finance)#Using bond prices. As above, where the value of an asset in the future is known (or expected), this value can be used to determine the asset's rational price today | https://en.wikipedia.org/wiki?curid=716969 |
Rational pricing In an option contract, however, exercise is dependent on the price of the underlying, and hence payment is uncertain. Option pricing models therefore include logic that either "locks in" or "infers" this future value; both approaches deliver identical results. Methods that lock-in future cash flows assume "arbitrage free pricing", and those that infer expected value assume "risk neutral valuation". To do this, (in their simplest, though widely used form) both approaches assume a "binomial model" for the behavior of the underlying instrument, which allows for only two states – up or down. If S is the current price, then in the next period the price will either be "S up" or "S down". Here, the value of the share in the up-state is S × u, and in the down-state is S × d (where u and d are multipliers with d < 1 < u and assuming d < 1+r < u; see the binomial options model). Then, given these two states, the "arbitrage free" approach creates a position that has an identical value in either state – the cash flow in one period is therefore known, and arbitrage pricing is applicable. The risk neutral approach infers expected option value from the intrinsic values at the later two nodes. Although this logic appears far removed from the Black–Scholes formula and the lattice approach in the Binomial options model, it in fact underlies both models; see The Black–Scholes PDE | https://en.wikipedia.org/wiki?curid=716969 |
Rational pricing The assumption of binomial behaviour in the underlying price is defensible as the number of time steps between today (valuation) and exercise increases, and the period per time-step is correspondingly short. The Binomial options model allows for a high number of very short time-steps (if coded correctly), while Black–Scholes, in fact, models a continuous process. The examples below have shares as the underlying, but may be generalised to other instruments. The value of a put option can be derived as below, or may be found from the value of the call using put-call parity. Here, the future payoff is "locked in" using either "delta hedging" or the "replicating portfolio" approach. As above, this payoff is then discounted, and the result is used in the valuation of the option today. It is possible to create a position consisting of Δ shares and 1 call sold, such that the position's value will be identical in the "S up" and "S down" states, and hence known with certainty (see Delta hedging). This certain value corresponds to the forward price above ("An asset with a known future price"), and as above, for no arbitrage to be possible, the present value of the position must be its expected future value discounted at the risk free rate, r. The value of a call is then found by equating the two. It is possible to create a position consisting of Δ shares and $B borrowed at the risk free rate, which will produce identical cash flows to one option on the underlying share | https://en.wikipedia.org/wiki?curid=716969 |
Rational pricing The position created is known as a "replicating portfolio" since its cash flows replicate those of the option. As shown above ("Assets with identical cash flows"), in the absence of arbitrage opportunities, since the cash flows produced are identical, the price of the option today must be the same as the value of the position today. Note that there is no discounting here – the interest rate appears only as part of the construction. This approach is therefore used in preference to others where it is not clear whether the risk free rate may be applied as the discount rate at each decision point, or whether, instead, a premium over risk free, differing by state, would be required. The best example of this would be under Real options analysis where managements' actions actually change the risk characteristics of the project in question, and hence the Required rate of return could differ in the up- and down-states. Here, in the above formulae, we then have: "Δ × "S up" - B × (1 + r up)..." and "Δ × "S down" - B × (1 + r down)..." . See Real options valuation#Technical considerations. (Another case where the modelling assumptions may depart from rational pricing is the valuation of employee stock options.) Here the value of the option is calculated using the risk neutrality assumption. Under this assumption, the "expected value" (as opposed to "locked in" value) is discounted | https://en.wikipedia.org/wiki?curid=716969 |
Rational pricing The expected value is calculated using the intrinsic values from the later two nodes: "Option up" and "Option down", with u and d as price multipliers as above. These are then weighted by their respective probabilities: "probability" p of an up move in the underlying, and "probability" (1-p) of a down move. The expected value is then discounted at r, the risk-free rate. Note that above, the risk neutral formula does not refer to the expected or forecast return of the underlying, nor its volatility – p as solved, relates to the risk-neutral measure as opposed to the actual probability distribution of prices. Nevertheless, both arbitrage free pricing and risk neutral valuation deliver identical results. In fact, it can be shown that "delta hedging" and "risk-neutral valuation" use identical formulae expressed differently. Given this equivalence, it is valid to assume "risk neutrality" when pricing derivatives. A more formal relationship is described via the fundamental theorem of arbitrage-free pricing. The arbitrage pricing theory (APT), a general theory of asset pricing, has become influential in the pricing of shares | https://en.wikipedia.org/wiki?curid=716969 |
Rational pricing APT holds that the expected return of a financial asset can be modelled as a linear function of various macro-economic factors, where sensitivity to changes in each factor is represented by a factor specific beta coefficient: The model derived rate of return will then be used to price the asset correctly – the asset price should equal the expected end of period price discounted at the rate implied by model. If the price diverges, arbitrage should bring it back into line. Here, to perform the arbitrage, the investor "creates" a correctly priced asset (a "synthetic" asset), a "portfolio" with the same net-exposure to each of the macroeconomic factors as the mispriced asset but a different expected return. See the arbitrage pricing theory article for detail on the construction of the portfolio. The arbitrageur is then in a position to make a risk free profit as follows: Note that under "true arbitrage", the investor locks-in a "guaranteed" payoff, whereas under APT arbitrage, the investor locks-in a positive "expected" payoff. The APT thus assumes "arbitrage in expectations" — i.e. that arbitrage by investors will bring asset prices back into line with the returns expected by the model. The capital asset pricing model (CAPM) is an earlier, (more) influential theory on asset pricing | https://en.wikipedia.org/wiki?curid=716969 |
Rational pricing Although based on different assumptions, the CAPM can, in some ways, be considered a "special case" of the APT; specifically, the CAPM's security market line represents a single-factor model of the asset price, where beta is exposure to changes in the "value of the market" as a whole. Classical valuation methods like the Black-Scholes model or the Merton model cannot account for systemic counterparty risk which is present in systems with financial interconnectedness. More details regarding risk-neutral, arbitrage-free asset and derivative valuation can be found in the systemic risk article (see also valuation under systemic risk). Arbitrage free pricing Risk neutrality and arbitrage free pricing Application to derivatives | https://en.wikipedia.org/wiki?curid=716969 |
The Calculus of Consent The Calculus of Consent: Logical Foundations of Constitutional Democracy is a book published by economists James M. Buchanan and Gordon Tullock in 1962. It is considered to be one of the classic works from the discipline of public choice in economics and political science. This work presents the basic principles of public choice theory. The analytical approach of the authors is based on "methodological individualism" - collective action is composed of individual actions and on the rejection of any organic interpretation of the state. A purely individualistic conception of collectivity is maintained: the state is an artifact, created by men and thus subject to change and perfection. Buchanan and Tullock maintain that only constitutional changes, which can be shown to be in the interest of all interested parties can be judged as "improvements" and therefore consider conceptual unanimity as the only legitimate decision-making rule. The authors analyze the traditional political science approach to voting systems, including majority voting as the standard as opposed to the unanimity rule. They show that none of those systems is perfect, since there is always a tradeoff: They conclude that decisions with potentially high external costs should require unanimity or at least supermajority systems. While many political scientists define the political process as a system in which the policy decisions are viewed as a private interest vs | https://en.wikipedia.org/wiki?curid=719505 |
The Calculus of Consent public interest struggle, Buchanan and Tullock suggest that the public interest is simply the aggregation of private decision makers. They show that in classical political science theory, the "public interest" is always the correct choice with the same appeal to all voters, which may or may not be opposed by "special interests". But that theory ignores the fact that most choices appeal to many different "law consumers" with varying strengths. An illustrative example is a choice whether to increase funding for health care. Some voters will strongly support or oppose it, but many may not care at all. They compare this to a market transaction, where the voters strongly desiring better health care could purchase the acceptance of the opposition and uninterested voters with concessions, resulting in an efficient allocation of resources, increasing the happiness of all parties (Pareto optimality). However the equivalent of this in the political realm is that politicians buy the votes of other politicians (or groups of special interest) by promising to vote for their issues. In the authors' opinion such log-rolling is to be expected, but in the traditional political science theory, it is anomalous. Thus their model explains certain things that the previous models of politics could not | https://en.wikipedia.org/wiki?curid=719505 |
The Calculus of Consent Employing the theoretical concepts of game theory and Pareto optimality, Buchanan and Tullock show that symmetry in benefits sharing may be at most a "necessary", but never a "sufficient" condition for the attainment of a Pareto optimal position. The introduction of side payments is the crucial element, which would lead to optimality. In a sense the introduction of side payments creates marketable property rights of the individual political vote (Chapter 12). Part I. The Conceptual Framework Part II. The Realm of Social Choice Part III. Analyses of Decision-Making Rules Part IV. The Economics and the Ethics of Democracy | https://en.wikipedia.org/wiki?curid=719505 |
May's theorem In social choice theory, states that simple majority voting is the only anonymous, neutral, and positively responsive social choice function between two alternatives. Further, this procedure is resolute when there are an odd number of voters and ties (indecision) are not allowed. Kenneth May first published this theory in 1952. Various modifications have been suggested by others since the original publication. Mark Fey extended the proof to an infinite number of voters. Robert Goodin and Christian List showed that, among methods of aggregating first-preference votes over multiple alternatives, plurality rule uniquely satisfies May's conditions; under approval balloting, a similar statement can be made about approval voting. Arrow's theorem in particular does not apply to the case of two candidates, so this possibility result can be seen as a mirror analogue of that theorem. (Note that anonymity is a stronger form of non-dictatorship.) Another way of explaining the fact that simple majority voting can successfully deal with at most two alternatives is to cite Nakamura's theorem. The theorem states that the number of alternatives that a rule can deal with successfully is less than the Nakamura number of the rule. The Nakamura number of simple majority voting is 3, except in the case of four voters. Supermajority rules may have greater Nakamura numbers. "Theorem:" A group decision function with an odd number of voters meets conditions 1, 2, 3, and 4 if and only if it is the simple majority method. | https://en.wikipedia.org/wiki?curid=719575 |
Population ageing is an increasing median age in a population due to declining fertility rates and rising life expectancy. Most countries have rising life expectancy and an ageing population (trends that emerged first in developed countries, but which are now seen in virtually all developing countries). This is the case for every country in the world except the 18 countries designated as "demographic outliers" by the UN. The aged population is currently at its highest level in human history. The UN predicts the rate of population ageing in the twenty-first century will exceed that of the previous century. The number of people aged 60 years and over has tripled since 1950, reaching 600 million in 2000 and surpassing 700 million in 2006. It is projected that the combined senior and geriatric population will reach 2.1 billion by 2050. Countries vary significantly in terms of the degree and pace of ageing, and the UN expects populations that began ageing later will have less time to adapt to its implications. is a shift in the distribution of a country's population towards older ages. This is usually reflected in an increase in the population's mean and median ages, a decline in the proportion of the population composed of children, and a rise in the proportion of the population composed of elderly. is widespread across the world | https://en.wikipedia.org/wiki?curid=720684 |
Population ageing It is most advanced in the most highly developed countries, but it is growing faster in less developed regions, which means that older persons will be increasingly concentrated in the less developed regions of the world. The Oxford Institute of Population Ageing, however, concluded that population ageing has slowed considerably in Europe and will have the greatest future impact in Asia, especially as Asia is in stage five (very low birth rate and low death rate) of the demographic transition model. Among the countries currently classified by the United Nations as more developed (with a total population of 1.2 billion in 2005), the overall median age rose from 28 in 1950 to 40 in 2010, and is forecast to rise to 44 by 2050. The corresponding figures for the world as a whole are 24 in 1950, 29 in 2010, and 36 in 2050. For the less developed regions, the median age will go from 26 in 2010 to 35 in 2050. arises from two (possibly related) demographic effects which are increasing longevity and declining fertility. An increase in longevity raises the average age of the population by increasing the numbers of surviving older people. A decline in fertility reduces the number of babies, and as the effect continues, the numbers of younger people in general also reduce. Of these two forces, it is declining fertility that is the largest contributor to population ageing in the world today | https://en.wikipedia.org/wiki?curid=720684 |
Population ageing More specifically, it is the large decline in the overall fertility rate over the last half century that is primarily responsible for the population ageing in the world's most developed countries. Because many developing countries are going through faster fertility transitions, they will experience even faster population ageing than the currently developed countries in the future. The rate at which the population ages is likely to increase over the next three decades; however, few countries know whether their older population are living the extra years of life in good or poor health. A "compression of morbidity" would imply reduced disability in old age, whereas an expansion would see an increase in poor health with increased longevity. Another option has been posed for a situation of "dynamic equilibrium". This is crucial information for governments if the limits of lifespan continue to increase indefinitely, as some researchers believe it will. The World Health Organization's suite of household health studies is working to provide the needed health and well-being evidence, including, for example the World Health Survey, and the Study on Global Ageing and Adult Health (SAGE). These surveys cover 308,000 respondents aged 18+ years and 81,000 aged 50+ years from 70 countries | https://en.wikipedia.org/wiki?curid=720684 |
Population ageing The Global Ageing Survey, exploring attitudes, expectations and behaviours towards later life and retirement, directed by George Leeson, and covering 44,000 people aged 40–80 in 24 countries from across the globe has revealed that many people are now fully aware of the ageing of the world's population and the implications which this will have on their lives and the lives of their children and grandchildren. Canada has the highest per capita immigration rate in the world, partly to counter population ageing. The C. D. Howe Institute, a conservative think tank, has suggested that immigration cannot be used as a viable means for countering population ageing. This conclusion is also seen in the work of other scholars. Demographers Peter McDonald and Rebecca Kippen comment, "[a]s fertility sinks further below replacement level, increasingly higher levels of annual net migration will be required to maintain a target of even zero population growth". The world's older population is growing dramatically. Asia and Europe are the two regions where a significant number of countries face population ageing. Within twenty years, many countries in these regions will face a situation where the largest population cohort will be those over 65 and average age approach 50 years old. The Oxford Institute of Population Ageing is an institution looking at global population ageing | https://en.wikipedia.org/wiki?curid=720684 |
Population ageing Its research reveals that many of the views of global ageing are based on myths and that there will be considerable opportunities for the world as its population matures. The Institute's Director, Professor Sarah Harper highlights in her book "Ageing Societies" the implications for work, families, health, education, and technology of the ageing of the world's population. Most of the developed countries now have sub-replacement fertility levels, and population growth now depends largely on immigration together with population momentum, which also arises from previous large generations now enjoying longer life expectancy. Of the roughly 150,000 people who die each day across the globe, about two thirds—100,000 per day—die of age-related causes.<ref name="doi10.2202/1941-6008.1011"></ref> In industrialised nations, the proportion is much higher, reaching 90%. The economic effects of an ageing population are considerable. Older people have higher accumulated savings per head than younger people, but spend less on consumer goods. Depending on the age ranges at which the changes occur, an ageing population may thus result in lower interest rates and the economic benefits of lower inflation. Because elderly people are more inflation averse, countries with more elderly tend to exhibit lower inflation rates . Some economists (Japan) see advantages in such changes, notably the opportunity to progress automation and technological development without causing unemployment | https://en.wikipedia.org/wiki?curid=720684 |
Population ageing They emphasise a shift from GDP to personal well-being. However, population ageing also increases some categories of expenditure, including some met from public finances. The largest area of expenditure in many countries is now health care, whose cost is likely to increase dramatically as populations age. This would present governments with hard choices between higher taxes, including a possible re-weighing of tax from earnings to consumption, and a reduced government role in providing health care. However, recent studies in some countries demonstrate the dramatic rising costs of health care are more attributable to rising drug and doctor costs, and higher use of diagnostic testing by all age groups, and not to the ageing population as is often claimed. The second-largest expenditure of most governments is education and these expenses will tend to fall with an ageing population, especially as fewer young people would probably continue into tertiary education as they would be in demand as part of the work force. Social security systems have also begun to experience problems. Earlier defined benefit pension systems are experiencing sustainability problems due to the increased longevity. The extension of the pension period was not paired with an extension of the active labour period or a rise in pension contributions, resulting in a decline of replacement ratios. The expectation of continuing population ageing prompts questions about welfare states’ capacity to meet the needs of their population | https://en.wikipedia.org/wiki?curid=720684 |
Population ageing In the early 2000s, the World Health Organization set up guidelines to encourage “active ageing” and to help local governments address the challenges of an ageing population (Global Age-Friendly Cities) with regard to urbanization, housing, transportation, social participation, health services, etc. Local governments are well positioned to meet the needs of local, smaller populations, but as their resources vary from one to another (e.g. property taxes, the existence of community organizations), the greater responsibility on local governments is likely to increase inequalities. In Canada, the most fortunate and healthier elders tend to live in more prosperous cities offering a wide range of services, whereas the less fortunate don't have access to the same level of resources. Private residences for the elderly also provide many services related to health and social participation (e.g. pharmacy, group activities and events) on site; however, they are not accessible to the less fortunate. Also, the environmental gerontology indicates the importance of the environment in active ageing. In fact, promoting good environments (natural, built, social) in ageing can improve health and quality of life, as well as reduce the problems of disability and dependence, and, in general, social spending and health spending. An ageing population may provide incentive for technological progress, as some hypothesise the effect of a shrinking workforce may be offset by technological unemployment or productivity gains | https://en.wikipedia.org/wiki?curid=720684 |
Population ageing Generally in West Africa and specifically in Ghana, social policy implications of demographic ageing are multidimensional (such as rural-urban distribution, gender composition, levels of literacy/illiteracy as well as their occupational histories and income security). Current policies on ageing in Ghana, seem to be disjointed, in which there are ideas on documents on how we can improve policies in population ageing, however these ideas are yet to be concretely implemented perhaps due to many arguments for example that older people are only a small proportion of the population Due to the global ageing population phenomenon, many countries seem to be increasing the age for old age security from 60 to 65, to decrease the cost of the scheme of the GDP. Age Discrimination can be defined as "the systematic and institutionalized denial of the rights of older people on the basis of their age by individuals, groups, organisations, and institutions". Some of this abuse can be a result of ignorance, thoughtlessness, prejudice and stereotyping. Forms of discrimination: economic accessibility, social accessibility, temporal accessibility and administrative accessibility. In the majority of the countries worldwide, particularly countries in Africa, older people are typically the poorest members of the social spectrum, living below the poverty line. | https://en.wikipedia.org/wiki?curid=720684 |
John Bates Clark Medal The is awarded by the American Economic Association to "that American economist under the age of forty who is adjudged to have made a significant contribution to economic thought and knowledge." According to "The Chronicle of Higher Education", it "is widely regarded as one of the field's most prestigious awards... second only to the Nobel Memorial Prize in Economic Sciences." Many of the recipients went on to receive the Nobel Prizes in their later careers, including the inaugural recipient Paul Samuelson. The award was made biennially until 2007, but from 2009 is now awarded every year because of the growth of the field. The award is named after the American economist John Bates Clark (1847–1938). Although the Clark medal is billed as a prize for American economists, it is sufficient that the candidates work in the US at the time of the award; US nationality is not necessary to be considered. | https://en.wikipedia.org/wiki?curid=723189 |
Economic unit In an economy, production, consumption and exchange are carried out by three basic economic units: the firm, the household, and the government. | https://en.wikipedia.org/wiki?curid=724629 |
Gold gram A gold gram is the amount of value represented by exactly one gram of gold. It is a unit of account frequently used for digital gold currencies. It is sometimes denoted by the symbol "gg", "AUG", or "GAU". A milligram of gold is sometimes referred to as a mil or mgg. Therefore, 1 AUG = 1 gg = 1000 mgg = 1000 mil, and 1 mil = 1 mgg = 0.001 gg = 0.001 AUG. This allows gold holdings and transfers to take place in tiny fractions of a gram (equivalent to a few cents) A possible source of confusion is that gold is often priced on the open market in the more traditional troy ounce (one troy ounce is exactly 31.1034768 grams, which is larger than the avoirdupois ounce generally in use in the United States and has a mass of 28.35 grams). Kilogram gold prices are commonly used by the Zurich Gold Pool where 1,000 kilograms = one metric tonne. | https://en.wikipedia.org/wiki?curid=730228 |
Philosophy, politics and economics or politics, philosophy and economics (PPE) is an interdisciplinary undergraduate or postgraduate degree which combines study from three disciplines. The first institution to offer degrees in PPE was the University of Oxford in the 1920s. This particular course has produced a significant number of notable graduates such as Aung San Suu Kyi, Burmese politician and State Counsellor of Myanmar, Nobel Peace Prize winner; Princess Haya bint Hussein daughter of the late King Hussein of Jordan and wife of the ruler of Dubai; Christopher Hitchens, the British–American polemicist, Oscar winning writer and director Florian Henckel von Donnersmarck; Philippa Foot, a British philosopher; Harold Wilson, Edward Heath and David Cameron, former Prime Ministers of the United Kingdom; Hugh Gaitskell, William Hague and Ed Miliband, former Leaders of the Opposition; former Prime Minister of Pakistan Benazir Bhutto and current Prime Minister of Pakistan Imran Khan; and Malcolm Fraser, Bob Hawke and Tony Abbott, former Prime Ministers of Australia. The course received fresh attention in 2017, when Nobel Peace Prize winner Malala Yousafzai earned a place. In the 1980s, the University of York went on to establish its own PPE degree based upon the Oxford model; King's College London, the University of Warwick, the University of Manchester, and other British universities later followed. According to the BBC, the Oxford PPE "dominate[s] public life" (in the UK) | https://en.wikipedia.org/wiki?curid=730473 |
Philosophy, politics and economics It is now offered at several other leading colleges and universities around the world. More recently Warwick University and King’s College added a new degree under the name of PPL (Politics, Philosophy and Law) with the aim to bring an alternative to the more classical PPE degrees. In the United States, it is offered by two Ivy League universities--the University of Pennsylvania and Yale University (under the designation Ethics, Politics and Economics). In the non-English speaking world the French "grande école" Sciences Po (Institut d'Etudes Politiques de Paris originally, now existing in 8 other big French cities: Aix, Bordeaux, Grenoble, Lille, Lyon, Rennes, Strasbourg and Toulouse) offers since the late 19th century an approaching cursus with a wide variety of electives. Sciences Po has been emulated in a number of countries. A good number of French political and entrepreunarial elite and civil servants are Sciences Po graduates, though the vast majority of political ministers and elected officials at the national level prefers or adds the even more selective "grande école" ENA (École Nationale d'Administration). In Spain, The Alliance 4 Universities composed by Carlos III University, Pompeu Fabra University, Autonomous University of Madrid and Autonomous University of Barcelona also offers the degree to a reduced number of high performance students | https://en.wikipedia.org/wiki?curid=730473 |
Philosophy, politics and economics Philosophy, Politics and Economics was established as a degree course at the University of Oxford in the 1920s, as a modern alternative to classics (known as "literae humaniores" or "greats" at Oxford) because it was thought as a more modern alternative for those entering the civil service. It was thus initially known as "modern greats". The first PPE students commenced their course in the autumn of 1921. The regulation by which it was established is Statt. Tit. VI. Sect. 1 C; "the subject of the Honour School of Philosophy, Politics, and Economics shall be the study of the structure, and the philosophical and economic principles, of Modern Society." Initially it was compulsory to study all three subjects for all three years of the course, but in 1970 this requirement was relaxed, and since then students have been able to drop one subject after the first year – most do this, but a minority continue with all three. During the 1960s some students started to critique the course from a left-wing perspective, culminating in the publication of a pamphlet, "The Poverty of PPE", in 1968, written by Trevor Pateman, who argued that it "gives no training in scholarship, only refining to a high degree of perfection the ability to write short dilettantish essays on the basis of very little knowledge: ideal training for the social engineer" | https://en.wikipedia.org/wiki?curid=730473 |
Philosophy, politics and economics The pamphlet advocated incorporating the study of sociology, anthropology and art, and to take on the aim of "assist(ing) the radicalisation and mobilisation of political opinion outside the university". In response, some minor changes were made, with influential leftist writers such as Frantz Fanon and Régis Debray being added to politics reading lists, but the core of the programme remained the same. Christopher Stray has pointed to the course as one reason for the gradual decline of the study of classics, as classicists in political life began to be edged out by those who had studied the modern greats. Dario Castiglione and Iain Hampsher-Monk have described the course as being fundamental to the development of political thought in the UK, since it established a connection between politics and philosophy. Previously at Oxford, and for some time subsequently at Cambridge, politics had been taught only as a branch of modern history. The programme is rooted in the view that to understand social phenomena one must approach them from several complementary disciplinary directions and analytical frameworks. In this regard, the study of philosophy is considered important because it both equips students with meta-tools such as the ability to reason rigorously and logically, and facilitates ethical reflection. The study of politics is considered necessary because it acquaints students with the institutions that govern society and help solve collective action problems | https://en.wikipedia.org/wiki?curid=730473 |
Philosophy, politics and economics Finally, studying economics is seen as vital in the modern world because political decisions often concern economic matters, and government decisions are often influenced by economic events. The vast majority of students at Oxford drop one of the three subjects for the second and third years of their course. Oxford now has more than 600 undergraduates studying the subject, admitting over 200 each year. Oxford PPE graduate Nick Cohen and former tutor Iain McLean consider the course's breadth important to its appeal, especially "because British society values generalists over specialists". Academic and Labour peer Maurice Glasman noted that "PPE combines the status of an elite university degree – PPE is the ultimate form of being good at school – with the stamp of a vocational course. It is perfect training for cabinet membership, and it gives you a view of life". However he also noted that it had an orientation towards consensus politics and technocracy. Geoffrey Evans, an Oxford fellow in politics and a senior tutor, critiques that the Oxford course's success and consequent over-demand is a self-perpetuating feature of those in front of and behind the scenes in national administration, in stating "all in all, it's how the class system works". In the current economic system he bemoans the unavoidable inequalities besetting admissions and thereby enviable recruitment prospects of successful graduates | https://en.wikipedia.org/wiki?curid=730473 |
Philosophy, politics and economics The argument itself intended as a paternalistic ethical reflection on how governments and peoples can perpetuate social stratification. Stewart Wood, a former adviser to Ed Miliband who studied PPE at Oxford in the 1980s and taught politics there in the 1990s and 2000s, acknowledged that the programme has been slow to catch up with contemporary political developments, saying that "it does still feel like a course for people who are going to run the Raj in 1936... In the politics part of PPE, you can go three years without discussing a single contemporary public policy issue". He also stated that the structure of the course gave it a centrist bias, due to the range of material covered: "...most students think, mistakenly, that the only way to do it justice is to take a centre position". | https://en.wikipedia.org/wiki?curid=730473 |
Lump of labour fallacy In economics, the lump of labour fallacy is the misconception that there is a fixed amount of work—a lump of labour—to be done within an economy which can be distributed to create more or fewer jobs. It was considered a fallacy in 1891 by economist David Frederick Schloss, who held that the amount of work is not fixed. The term originated to rebut the idea that reducing the number of hours employees are allowed to labour during the working day would lead to a reduction in unemployment. The term is also commonly used to describe the belief that increasing labour productivity, immigration, or automation causes an increase in unemployment. Whereas opponents of immigration argue that immigrants displace a country's workers, this is a fallacy, as the number of jobs in the economy is not fixed and immigration increases the size of the economy and may increase productivity, innovation, and overall economic activity, as well as reduce incentives for off-shoring and business closures, thus creating more jobs. The lump of labor fallacy is also known as the lump of jobs fallacy, fallacy of labour scarcity, fixed pie fallacy, and the zero-sum fallacy – due to its ties to zero-sum games. The term "fixed pie fallacy" is also used more generally to refer to the idea that there is a fixed amount of wealth in the world. This and other zero-sum fallacies can be caused by zero-sum bias. The lump of labour fallacy has been applied to concerns around immigration and labour | https://en.wikipedia.org/wiki?curid=732763 |
Lump of labour fallacy Given a fixed availability of employment, the lump of labour position argues that allowing immigration of working-age people reduces the availability of work for native-born workers ("they are taking our jobs"). However, skilled immigrating workers can bring capabilities that are not available in the native workforce, for example in academic research or information technology. Additionally, immigrating workforces also create new jobs by expanding demand, thus creating more jobs, either directly by setting up businesses (therefore requiring local services or workers), or indirectly by raising consumption. As an example, a greater population that eats more groceries will increase demand from shops, which will therefore require additional shop staff. Advocates of restricting working hours regulation may assume that there is a fixed amount of work to be done within the economy. By reducing the amount that those who are already employed are allowed to work, the remaining amount will then accrue to the unemployed. This policy was adopted by the governments of Herbert Hoover in the United States and Lionel Jospin in France, in the 35-hour working week (though in France various exemptions to the law were granted by later centre-right governments). Many economists agree that such proposals are likely to be ineffective, because there are usually substantial administrative costs associated with employing more workers | https://en.wikipedia.org/wiki?curid=732763 |
Lump of labour fallacy These can include additional costs in recruitment, training, and management that would increase average cost per unit of output. This overall would lead to a reduced production per worker, and may even result in higher unemployment. Early retirement has been used to induce workers to accept termination of employment before retirement age following the employer's diminished labour needs. Government support for the practice has come from the belief that this should lead to a reduction in unemployment. The unsustainability of this practice has now been recognised, and the trend in Europe is now towards postponement of the retirement age. In an editorial in "The Economist" a thought experiment is proposed in which old people leave the workforce in favour of young people, on whom they become dependent for their living through state benefits. It is then argued that since growth depends on having either more workers or greater productivity, the society cannot really become more prosperous by paying an increasing number of its citizens unproductively. The article also points out that even early retirees with private pension funds become a burden on society as they also depend on equity and bond income generated by workers. | https://en.wikipedia.org/wiki?curid=732763 |
Agricultural economics is an applied field of economics concerned with the application of economic theory in optimizing the production and distribution of food and fiber. began as a branch of economics that specifically dealt with land usage, it focused on maximizing the crop yield while maintaining a good soil ecosystem. Throughout the 20th century the discipline expanded and the current scope of the discipline is much broader. today includes a variety of applied areas, having considerable overlap with conventional economics. Agricultural economists have made substantial contributions to research in economics, econometrics, development economics, and environmental economics. influences food policy, agricultural policy, and environmental policy. Economics has been defined as the study of resource allocation under scarcity. Agricultural economics, or the application of economic methods to optimizing the decisions made by agricultural producers, grew to prominence around the turn of the 20th century. The field of agricultural economics can be traced back to works on land economics. Henry Charles Taylor was the greatest contributor with the establishment of the Department of Agricultural Economics at Wisconsin in 1909. Another contributor, 1979 Nobel Economics Prize winner Theodore Schultz, was among the first to examine development economics as a problem related directly to agriculture | https://en.wikipedia.org/wiki?curid=733141 |
Agricultural economics Schultz was also instrumental in establishing econometrics as a tool for use in analyzing agricultural economics empirically; he noted in his landmark 1956 article that agricultural supply analysis is rooted in "shifting sand", implying that it was and is simply not being done correctly. One scholar summarizes the development of agricultural economics as follows: arose in the late 19th century, combined the theory of the firm with marketing and organization theory, and developed throughout the 20th century largely as an empirical branch of general economics. The discipline was closely linked to empirical applications of mathematical statistics and made early and significant contributions to econometric methods. In the 1960s and afterwards, as agricultural sectors in the OECD countries contracted, agricultural economists were drawn to the development problems of poor countries, to the trade and macroeconomic policy implications of agriculture in rich countries, and to a variety of production, consumption, and environmental and resource problems. Agricultural economists have made many well-known contributions to the economics field with such models as the cobweb model, hedonic regression pricing models, new technology and diffusion models (Zvi Griliches), multifactor productivity and efficiency theory and measurement, and the random coefficients regression. The farm sector is frequently cited as a prime example of the perfect competition economic paradigm | https://en.wikipedia.org/wiki?curid=733141 |
Agricultural economics In Asia, agricultural economics was offered first by the University of the Philippines Los Baños Department of Agricultural Economics in 1919. Today, the field of agricultural economics has transformed into a more integrative discipline which covers farm management and production economics, rural finance and institutions, agricultural marketing and prices, agricultural policy and development, food and nutrition economics, and environmental and natural resource economics. Since the 1970s, agricultural economics has primarily focused on seven main topics, according to a scholar in the field: agricultural environment and resources; risk and uncertainty; food and consumer economics; prices and incomes; market structures; trade and development; and technical change and human capital. In the field of environmental economics, agricultural economists have contributed in three main areas: designing incentives to control environmental externalities (such as water pollution due to agricultural production), estimating the value of non-market benefits from natural resources and environmental amenities (such as an appealing rural landscape), and the complex interrelationship between economic activities and environmental consequences. With regard to natural resources, agricultural economists have developed quantitative tools for improving land management, preventing erosion, managing pests, protecting biodiversity, and preventing livestock diseases | https://en.wikipedia.org/wiki?curid=733141 |
Agricultural economics While at one time, the field of agricultural economics was focused primarily on farm-level issues, in recent years agricultural economists have studied diverse topics related to the economics of food consumption. In addition to economists' long-standing emphasis on the effects of prices and incomes, researchers in this field have studied how information and quality attributes influence consumer behavior. Agricultural economists have contributed to understanding how households make choices between purchasing food or preparing it at home, how food prices are determined, definitions of poverty thresholds, how consumers respond to price and income changes in a consistent way, and survey and experimental tools for understanding consumer preferences. research has addressed diminishing returns in agricultural production, as well as farmers' costs and supply responses. Much research has applied economic theory to farm-level decisions. Studies of risk and decision-making under uncertainty have real-world applications to crop insurance policies and to understanding how farmers in developing countries make choices about technology adoption. These topics are important for understanding prospects for producing sufficient food for a growing world population, subject to new resource and environmental challenges such as water scarcity and global climate change | https://en.wikipedia.org/wiki?curid=733141 |
Agricultural economics Development economics is broadly concerned with the improvement of living conditions in low-income countries, and the improvement of economic performance in low-income settings. Because agriculture is a large part of most developing economies, both in terms of employment and share of GDP, agricultural economists have been at the forefront of empirical research on development economics, contributing to our understanding of agriculture's role in economic development, economic growth and structural transformation. Many agricultural economists are interested in the food systems of developing economies, the linkages between agriculture and nutrition, and the ways in which agriculture interact with other domains, such as the natural environment. The International Association of Agricultural Economists (IAAE) is a worldwide professional association, which holds its major conference every three years. The association publishes the journal "Agricultural Economics". There also is a European Association of Agricultural Economists (EAAE), an African Association of Agricultural Economists (AAAE) and an Australian Agricultural and Resource Economics Society. Substantial work in agricultural economics internationally is conducted by the International Food Policy Research Institute. In the United States, the primary professional association is the Agricultural & Applied Economics Association (AAEA), which holds its own annual conference and also co-sponsors the annual meetings of the Allied Social Sciences Association (ASSA) | https://en.wikipedia.org/wiki?curid=733141 |
Agricultural economics The AAEA publishes the "American Journal of Agricultural Economics" and "Applied Economic Perspectives and Policy". Graduates from agricultural and applied economics departments find jobs in many sectors of the economy: agricultural management, agribusiness, commodities markets, education, the financial sector, government, natural resource and environmental management, real estate, and public relations. Careers in agricultural economics require at least a bachelor's degree, and research careers in the field require graduate-level training; see Masters in Agricultural Economics. A 2011 study by the Georgetown Center on Education and the Workforce rated agricultural economics tied for 8th out of 171 fields in terms of employability. | https://en.wikipedia.org/wiki?curid=733141 |
Trickle-down economics Trickle-down economics, also called trickle-down theory, refers to the economic proposition that taxes on businesses and the wealthy in society should be reduced as a means to stimulate business investment in the short term and benefit society at large in the long term. In recent history, the term has been used by critics of supply-side economic policies, such as "Reaganomics." Whereas general supply-side theory favors lowering taxes overall, trickle-down theory more specifically targets taxes on the upper end of the economic spectrum. The term "trickle-down" originated as a joke by humorist Will Rogers and today is often used to criticize economic policies that favor the wealthy or privileged while being framed as good for the average citizen. David Stockman, who as Ronald Reagan's budget director championed Reagan's tax cuts at first, later became critical of them and told journalist William Greider that "supply-side economics" is the trickle-down idea: Political opponents of the Reagan administration soon seized on this language in an effort to brand the administration as caring only about the wealthy. Some studies suggest a link between trickle-down economics and reduced growth. has been widely criticized particularly by left-wing, centre-left and moderate politicians and economists, but also some right-wing politicians | https://en.wikipedia.org/wiki?curid=735201 |
Trickle-down economics A 2019 study in the "Journal of Political Economy" found, contrary to trickle-down theory, that "the positive relationship between tax cuts and employment growth is largely driven by tax cuts for lower-income groups and that the effect of tax cuts for the top 10 percent on employment growth is small." In 1896, Democratic presidential candidate William Jennings Bryan described the concept using the metaphor of a "leak" in his Humorist Will Rogers jokingly advised in a column in 1932: This election was lost four and six years ago, not this year. They [Republicans] didn’t start thinking of the old common fellow till just as they started out on the election tour. The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot. But he didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow's hands. They saved the big banks, but the little ones went up the flue. William J. Bennett wrote:Humorist Will Rogers referred to the theory that cutting taxes for higher earners and businesses was a "trickle-down" policy, a term that has stuck over the years | https://en.wikipedia.org/wiki?curid=735201 |
Trickle-down economics Presidential speechwriter Samuel Rosenman wrote:The philosophy that had prevailed in Washington since 1921, that the object of government was to provide prosperity for those who lived and worked at the top of the economic pyramid, in the belief that prosperity would trickle down to the bottom of the heap and benefit all. The "Merriam-Webster Dictionary" notes that the first known use of "trickle-down" as an adjective meaning "relating to or working on the principle of trickle-down theory" was in 1944 while the first known use of "trickle-down theory" was in 1954. After leaving the presidency, Democrat Lyndon B. Johnson alleged "Republicans [...] simply don't know how to manage the economy. They're so busy operating the trickle-down theory, giving the richest corporations the biggest break, that the whole thing goes to hell in a handbasket." Although "trickle-down" is commonly mentioned in reference to income, it has been used by economist Arthur Okun to refer to the flow of the benefits of innovation, which do not accrue entirely to the "great entrepreneurs and inventors","" but trickle down to the masses. More precisely, Nobel prize economist William Nordhaus estimates that innovators are able to capture only an extremely low 2.2 percent of the total surplus from innovation. Circling back to income "trickle-down," the surplus from innovation can take the form of gains in real wages, which are spread throughout the economy, according to Nobel prize economist Paul Romer | https://en.wikipedia.org/wiki?curid=735201 |
Trickle-down economics In particular, economist William Baumol argues that "the bulk of the unprecedented and widespread rise in the developed world’s living standards since the Industrial Revolution could not have occurred without the revolution’s innovations." Speaking on the Senate floor in 1992, Senator Hank Brown (R-Colorado) said: "Mr. President, the trickle-down theory attributed to the Republican Party has never been articulated by President Reagan and has never been articulated by President Bush and has never been advocated by either one of them. One might argue whether trickle-down makes any sense or not. To attribute to people who have advocated the opposite in policies is not only inaccurate but poisons the debate on public issues." Economist Thomas Sowell has written extensively on trickle-down economics and loathes its characterization, citing that supply-side economics has never claimed to work in a "trickle-down" fashion. Rather, the economic theory of reducing marginal tax rates works in precisely the opposite direction: "Workers are always paid first and then profits flow upward later – if at all." The economist John Kenneth Galbraith noted that "trickle-down economics" had been tried before in the United States in the 1890s under the name "horse-and-sparrow theory", writing: Galbraith claimed that the horse-and-sparrow theory was partly to blame for the Panic of 1896. While running against Ronald Reagan for the Presidential nomination in 1980, George H. W | https://en.wikipedia.org/wiki?curid=735201 |
Trickle-down economics Bush had derided the trickle-down approach as "voodoo economics". In the 1992 presidential election, independent candidate Ross Perot also referred to trickle-down economics "political voodoo". In the same election during a presidential town hall debate, Bill Clinton said: In New Zealand, Labour Party Member of Parliament Damien O'Connor has called trickle-down economics "the rich pissing on the poor" in the Labour Party campaign launch video for the 2011 general election. A 2012 study by the Tax Justice Network indicates that wealth of the super-rich does not trickle down to improve the economy, but it instead tends to be amassed and sheltered in tax havens with a negative effect on the tax bases of the home economy. In 2013, Pope Francis referred to "trickle-down theories" in his apostolic exhortation "Evangelii Gaudium" with the following statement (No. 54): A 2015 paper by researchers for the International Monetary Fund argues that there is no trickle-down effect as the rich get richer: [I]f the income share of the top 20 percent (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20 percent (the poor) is associated with higher GDP growth. A 2015 report on policy by economist Pavlina R | https://en.wikipedia.org/wiki?curid=735201 |
Trickle-down economics Tcherneva described the failings of increasing economic gains of the rich without commensurate participation by the working and middle classes, referring to the problematic policies as "Reagan-style trickle-down economics," and "a trickle-down, financial-sector-driven policy regime." In a 2016 presidential candidates debate, Hillary Clinton accused Donald Trump of supporting the "most extreme" version of trickle-down economics with his tax plan, calling it "trumped-up trickle-down" as a pun on his name. | https://en.wikipedia.org/wiki?curid=735201 |
Rostow's stages of growth Rostow's Stages of Economic Growth model is one of the major historical models of economic growth. It was published by American economist Walt Whitman Rostow in 1960. The model postulates that economic growth occurs in five basic stages, of varying length: Rostow's model is one of the more structuralist models of economic growth, particularly in comparison with the "backwardness" model developed by Alexander Gerschenkron, although the two models are not mutually exclusive. Rostow argued that economic take-off must initially be led by a few individual economic sectors. This belief echoes David Ricardo's comparative advantage thesis and criticizes Marxist revolutionaries' push for economic self-reliance in that it pushes for the "initial" development of only one or two sectors over the development of all sectors equally. This became one of the important concepts in the theory of modernization in social evolutionism. In addition to the five stages he had proposed in "The Stages of Economic Growth" in 1960, Rostow discussed the sixth stage beyond high mass-consumption and called it "the search for quality" in 1971 | https://en.wikipedia.org/wiki?curid=739974 |
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