Unstable Market

The necessary and sufficient condition for convergence is that the slope of the supply curve be greater than the absolute value of the slope of the demand curve. If the slope of the supple curve is less, then price and quantity diverge from equilibrium over time.

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Deregulation, Consolidation, and Collusion in American Banking

Deregulation Going into the 1980s, American banks faced heavy M&A, intrastate branching, and interstate banking restrictions. By the end of the 1980s, most states had lifted these M&A and branching restrictions… Consolidation  Consequently, the number of mergers increased while the number of new entrants into the market declined. The cost of entering the market was … Continue reading Deregulation, Consolidation, and Collusion in American Banking

“The Subprime Solution”: a must-read

I purchased this book on a whim a few weeks ago. My high hopes were satisfied as Shiller gave insightful explanations of how the subprime bubble occurred and offered innovative short-run and long-run suggestions for minimized the risk of another crisis. Here are a few of his propositions: Democratize finance. A major cause of the … Continue reading “The Subprime Solution”: a must-read

The Unstarvable Beast: The Need for more Effective Government Spending

Revealing article by Harvard’s Kenneth Rogoff linked above… Key Takeaways:  The government operates in the service industry, which generally exhibits slow productivity growth. While productivity growth is slow, the industry is still forced to pay higher wages for relatively the same output because it competes for workers in the same labor market as other, high-productivity … Continue reading The Unstarvable Beast: The Need for more Effective Government Spending