Author: Damian Merciar
Damian Merciar is Managing Director of Merciar Business Consulting, http://www.merciar.com, a niche business economics consultancy founded in 1998. He has over twenty years experience in the areas of commercial Business Strategy. He is experienced in the transition environments of nationalized to private sector state utilities and the senior practice of commercial management, advisorial consultancy, and implementation. He has carried out policy advisory work for government ministries and been an adviser to institutional bodies proposing changes to government. He holds an MSc Economics from the University of Surrey’s leading Economics department and an MBA from the University of Kent. Also attending the leading University in the Middle East, studying International Relations and Language, for which he won a competitive international scholarship, and has a BA (Hons) in Economic History and Political Economy from the University of Portsmouth. He is currently based in London.
The Economic Consequences of the Overthrow of the Natural Rate of Interest
For quite a few months I have, on this blog, been alluding to a paper that I had written which showed that the natural rate of interest is implicitly dependent on the EMH in its strong-form in order to be coherent. I have finally published this paper (in working paper form) with the Levy Institute and it can be read here:
Endogenous Money and the Natural Rate of Interest: The Reemergence of Liquidity Preference and Animal Spirits in the Post-Keynesian Theory of Capital Markets
Some notes on the paper.
The motivation for the paper was that when reading up on endogenous money during my degree I found that mainstream economists had largely integrated it in their more recent models. This integration, as the paper notes, usually took the form of a Taylor Rule. I should be clear that although this had become standard practice at some levels of the discipline…
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The myth that sold the financial bailout
Academic Sophistry: Dart-Throwing Monkeys and the EMH
The other day I did a post on the Efficient Markets Hypothesis (EMH) that generated some discussion. I want to deal with a few of the issues raised in a some upcoming blogposts.
One issue of interest was that many EMH proponents said: “Sure, Warren Buffett and Keynes beat the market over a long-period we’re not saying that. Some people might beat the market out of pure luck.” Well that seems like rubbish to me.
Think about this. If the EMH says that no one single person can beat the market over the long-run that is a testable proposition. But if they then say that some people might but this is “by luck” that is not testable. That is, in fact, based on an a priori assumption that anyone who beats the market did not do so by skill.
Now, personally I think that some people beat the market by…
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How Do Capitalist Firms Grow?
I’m currently reading Marc Lavoie’s new book Post-Keynesian Economics: New Foundations. This really is the defining text of Post-Keynesian economics today. Anyone who is really interested in Post-Keynesian economics should try to get their hands on it. It is a bit overpriced right now — so you can probably only realistically get it if you order it to your university library — but hopefully Marc can find a way to get it out for lower cost
The book is over 600 pages long and most of those pages are pretty dense. When I’ve finished it I will be either writing a review on the book or a full paper. I’m leaning toward the latter right now as I think there are a few things that might be worth saying. Anyway, for now I just want to discuss a single component of the theory that can be summarised in one…
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FROM THE ARCHIVES: ON CIVILIZATIONS
Another review from the archives while I am away, the last hopefully before normal service resumes on Pandaemonium. This is a review of Felipe Fernández-Armesto’s Civilizations, first published in the Independent on Sunday, 8 October 2000.
‘It can now be asserted upon convincing evidence that savagery preceded barbarism in all the tribes of mankind, as barbarism is known to have preceded civilization.’ So wrote Victorian anthropologist Lewis Henry Morgan in his 1877 classic Ancient Societies. According to Morgan, savagery, barbarism and civilization ‘are connected with each other in a natural as well as a necessary sequence of progress.’
The idea of history as progressing in a series of natural stages from savagery to civilization is a very Victorian notion, testament to the values of a bygone era. Ours is an age deeply skeptical both of the idea of historical progress and of the capacity of humans…
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MERCIAR BUSINESS CONSULTING 