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280 pages of frantic search for an end. New York, Denver, San Francisco, New Orleans, Mexico City, and the miles in between. Music, drugs, talk, sex. Wikipedia: Inspired by a 10000-word rambling letter from his friend Neal Cassady, Kerouac in 1950 outlined the “Essentials of Spontaneous Prose” and decided to tell the story of his years on the road with Cassady as if writing a letter to a friend in a form that reflected the improvisational fluidity of jazz.In a letter to a student in 1961,...

Arnold Kling (2016), Specialization and Trade, A Re-Introduction to Economics, Washington, DC, Cato Institute. Kling’s central theme in this short book of nine main chapters is that specialization, trade, and the coordination of individual plans by means of the price system and the profit motive play fundamental roles in modern economies. Most mainstream economists would agree with this assessment. Their models of trade, growth, and innovation certainly include the four elements, with...

Kurt Gödel. John von Neumann. Albert Einstein.

Economics is not about predicting stock markets, exchange rates, or GDP. Its aim is to make sense of human interaction in the small and the large. Marek Hlavac’s online course Nobel Prize-Winning Contributions to Economics provides an overview over the work of deep economic thinkers.

Ivan K. Aivazovsky, 1883

In the FT, Mehreen Khan reports about the IMF’s conditional acceptance to lend to Greece. The IMF’s “agreement in principle” (AIP) tool draws on a practice where the fund is able to greenlight its involvement in a debtor country, conditional on the government and its creditors agreeing to future debt relief measures. Of course, the dispute about the merits of debt relief is unresolved. The IMF thinks Greek debt is ‘unsustainable’ and the European creditors should bear more losses, earlier...

In the Trustlines Network every user is acting as a bank by granting credit lines to friends they trust. This allows to issue people powered money between friends and facilitate secure payments between strangers, by sending payments along a chain of trusting friends. Think of IOUs or cheques and netting in the blockchain.

In a (December 2015) Bank of England Staff Working Paper, Lukasz Rachel and Thomas Smith dissect the global decline in long-term real interest rates over the last thirty years. A summary of their executive summary: Market measures of long-term risk-free real interest rates have declined by around 450bps. Absent signs of overheating this suggests that the global neutral rate fell. Expected trend growth as well as other factors affecting desired savings and investment determine the neutral...

In a Peterson Institute working paper, Jeromin Zettelmeyer, Eike Kreplin, and Ugo Panizza conclude that the answer to that question depends on your assumptions. The authors compare several scenarios, including scenarios A–C, the baseline scenario of the European institutions and two more pessimistic variants; scenario I which underlies the IMF reasoning and which assumes that “Greece will not undertake the structural reforms needed to achieve higher potential growth”; and scenario D,...