How Tales of ‘Flippers’ Led to a Housing Bubble

There is still no consensus on why the last housing boom and bust happened. That is troubling, because that violent housing cycle helped to produce the Great Recession and financial crisis of 2007 to 2009. We need to understand it all if we are going to be able to avoid ordeals like that in the future.

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Caution Signals Are Blinking for the Trump Bull Market

Despite an eight-day losing streak that ended on Tuesday, the stock market has generally been buoyant in the opening weeks of the Trump administration. The bullish mood could be a self-fulfilling prophecy and lead to continuing gains for a while.

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Robotization Without Taxation?

NEW HAVEN – The idea of a tax on robots was raised last May in a draft report to the European Parliament prepared by MEP Mady Delvaux from the Committee on Legal Affairs. Emphasizing how robots could boost inequality, the report proposed that there might be a “need to introduce corporate reporting requirements on the extent and proportion of the contribution of robotics and AI to the economic results of a company for the purpose of taxation and social security contributions.”

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Why Trump’s 2-for-1 Rule on Regulations Is No Quick Fix

President Trump intends to pare back a vast array of government regulations in fields like environmental protection, food and drug safety, and consumer finance. On Jan. 30 he ordered that for every new regulation it imposes, the government must get rid of two old ones.

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Narrative Economics

This address considers the epidemiology of narratives relevant to economic fluctuations. The human brain has always been highly tuned towards narratives, whether factual or not, to justify ongoing actions, even such basic actions as spending and investing. Stories motivate and connect activities to deeply felt values and needs. Narratives “go viral” and spread far, even worldwide, with economic impact. The 1920-21 Depression, the Great Depression of the 1930s, the so-called “Great Recession” of 2007-9 and the contentious political-economic situation of today, are considered as the results of the popular narratives of their respective times. Though these narratives are deeply human phenomena that are difficult to study in a scientific manner, quantitative analysis may help us gain a better understanding of these epidemics in the future.

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The Illusions Driving Up US Asset Prices

NEW HAVEN – Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.

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Making America Great Again Isn’t Just About Money and Power

“Make America Great Again,” the slogan of President-elect Donald J. Trump’s successful election campaign, has been etched in the national consciousness. But it is hard to know what to make of those vague words. 

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