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Economics and Finance

Economics and Finance

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An Emerging Paradigm

Financial crises have some common storylines, among them bursting asset bubbles, bank failures, sharp tightening of credit, and downturn in trade. They are also different from one another. Some start with sudden reversal of international capital flows, others with domestic credit implosions. A challenge to economic research is to integrate common as well as disparate threads into a coherent analytical framework that is at the same time empirically testable.

A Mechanism Design Approach

Dynamic allocation and pricing problems occur in numerous frameworks, including the pricing of seasonal goods in retail, the allocation of a fixed inventory in a given period of time, and the assignment of personnel to incoming tasks. Although most of these problems deal with issues treated in the mechanism design literature, the modern revenue management (RM) literature focuses instead on analyzing properties of restricted classes of allocation and pricing schemes.

A Behavioral Approach to Improving Skills and Investment Processes

Portfolio management is a tough business. Each day, managers face the challenges of an ever-changing and unforgiving market, where strategies and processes that worked yesterday may not work today, or tomorrow. The usual advice for improving portfolio performance—refining your strategy, staying within your style, doing better research, trading more efficiently—is important, but doesn’t seem to affect outcomes sufficiently.

Edited by Paul H. Schultz

The Dodd–Frank Wall Street Reform and Consumer Protection Act, passed by Congress in 2010 largely in response to the financial crisis, created the Financial Stability Oversight Council and the Consumer Financial Protection Bureau; among other provisions, it limits proprietary trading by banks, changes the way swaps are traded, and curtails the use of credit ratings. The effects of Dodd–Frank remain a matter for speculation; more than half of the regulatory rulemaking called for in the bill has yet to be completed.

This manual includes solutions to the odd-numbered exercises in Economic Dynamics in Discrete Time. Some exercises are purely analytical, while others require numerical methods. Computer codes are provided for most problems. Many exercises ask the reader to apply the methods learned in a chapter to solve related problems, but some exercises ask the reader to complete missing steps in the proof of a theorem or in the solution of an example in the book.

This book offers a unified, comprehensive, and up-to-date treatment of analytical and numerical tools for solving dynamic economic problems. The focus is on introducing recursive methods—an important part of every economist’s set of tools—and readers will learn to apply recursive methods to a variety of dynamic economic problems. The book is notable for its combination of theoretical foundations and numerical methods. Each topic is first described in theoretical terms, with explicit definitions and rigorous proofs; numerical methods and computer codes to implement these methods follow.

Useful Economics for the World Economy

As the global economic crisis continues to cause damage, some policy makers have called for a more Keynesian approach to current economic problems. In this book, the economists Peter Temin and David Vines provide an accessible introduction to Keynesian ideas that connects Keynes’s insights to today’s global economy and offers readers a way to understand current policy debates.

This landmark graduate-level text combines depth and breadth of coverage with recent, cutting-edge work in all the major areas of modern labor economics. Its command of the literature and its coverage of the latest theoretical, methodological, and empirical developments make it also a valuable resource for practicing labor economists.

Basics and Extensions

Spreadsheets are used daily by millions of people for tasks that range from organizing a list of addresses to carrying out complex economic simulations. Spreadsheet programs are easy to learn and convenient to use because they have a clear visual model and a simple efficient underlying computational model. Yet although the basic spreadsheet model could be extended, improved, or otherwise experimented with in many ways, there is no coherently designed, reasonably efficient open source spreadsheet implementation that is a suitable platform for such experiments.

The Green Paradox and Beyond

Recent developments suggest that well-intended climate policies--including carbon taxes and subsidies for renewable energy—might not accomplish what policy makers intend. Hans-Werner Sinn has described a “green paradox,” arguing that these policies could hasten global warming by encouraging owners of fossil fuel reserves to increase their extraction rates for fear that their reserves will become worthless. In this volume, economists investigate the empirical and theoretical support for the green paradox.

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