Economics

A Little Nudge

June 2, 2010

You may or may not have been aware of a little book that’s made waves in the econo / political blogosphere recently.  Nudge, a work by Richard Thaler and Cass Sunstein (though, one is not an economist), discusses how very small changes to our behavior lead to great(er) improvements in our well-being. For a personal [...]

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Economics and Modern Philosophy

May 24, 2010
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Ah…my day to shine. Good news ahead. The federal government has planned the creation of a consumer financial protection agency. Ralph Nader himself is turning over in his grave with interest. Or wait… Ralph Nader is still alive—I think. Anyway, he’s turning over somewhere—probably in a cozy sofa chair at Starbucks in DuPont Circle. Here [...]

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Numerophobia

May 18, 2010
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Numbers? Ahh! Recent work highlighted in this week’s Economist showed that, after accounting for a whole host of differences between people who took out “sub-prime” mortgage during the run up to the housing finance crisis, the defining variable that predicted whether or not these people would miss payments, default, or be foreclosed upon came down [...]

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You’ve Sunk My Costs

May 12, 2010

Economists tend to think about decisions in a different way than non-Economists. Sometimes our ideas make theoretical sense but are hard to put into practice. For instance, we’ll typically argue against pre-paying on a mortgage (given a reasonable interest rate, say less than 9%) because most American households hold unbalanced portfolios that are made up [...]

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Socioeconomic Standing, Age & Where We Live

May 3, 2010

The other week, I talked about asset diversification involving our biggest physical asset (our house).   I felt that how we treat our house in our investment portfolio and what kind of house we buy is not properly understood, so I brought in an economics toolkit and went to town. This week, I’ll be focusing my [...]

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