1/4
Parents are protesting in Beijing because an education company to whom they made payments has gone bankrupt, and are demanding that somebody (the government, I guess) make up those payments.
scmp.com/economy/global… via @scmpnews
Parents are protesting in Beijing because an education company to whom they made payments has gone bankrupt, and are demanding that somebody (the government, I guess) make up those payments.
scmp.com/economy/global… via @scmpnews
2/4
Clearly moral hazard is strongly embedded within the economy, and while much has already been written about its effect on lending discipline, I would add that moral hazard is also a kind of positive feedback mechanism. It reinforces economic activity and growth when times...
Clearly moral hazard is strongly embedded within the economy, and while much has already been written about its effect on lending discipline, I would add that moral hazard is also a kind of positive feedback mechanism. It reinforces economic activity and growth when times...
3/4
are good by encouraging risk-taking and by effectively lowering transaction costs, but when conditions reverse it can exacerbate the slowdown by inhibiting risk-taking and forcing a (sometimes chaotic) adjustment of expectations.
are good by encouraging risk-taking and by effectively lowering transaction costs, but when conditions reverse it can exacerbate the slowdown by inhibiting risk-taking and forcing a (sometimes chaotic) adjustment of expectations.
4/5
I think macroeconomists generally understand very little about how these mechanisms – which include speculative balance sheets, government non-transparency, capital inflows, etc. – can reinforce the economy both on the way up and (often more brutally) on the way down.
I think macroeconomists generally understand very little about how these mechanisms – which include speculative balance sheets, government non-transparency, capital inflows, etc. – can reinforce the economy both on the way up and (often more brutally) on the way down.
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