How More Can Be Less With Safety Regulation

Safety regulation can have unintended consequences. Looking at antilock brakes, “too big to fail,” and Greek loans we see the Peltzman effect.

Using a Fat Tail to Describe Stock Market Risk

When the unexpected occurs and changes our view of stock market risk, we call it a black swan or fat tail because it is far from the mean of a bell curve.

Our Weekly Roundup: From Bank Regulation to Water Taxation

This week’s everyday economics stories included minimum wage, price floors, cost-benefit analysis, behavioral economics, financial regulation and public goods.

Financial Regulation: The Eddie Murphy Rule

In its 2300 pages of financial regulation, Dodd-Frank has an Eddie Murphy Rule. Do you remember the end of Trading Places? Having bribed someone to get a USDA orange crop report before it was publicly released, the Duke brothers start…

Too Big To Fail: The Volcker Rule or Glass Steagall?

It will be tough to remedy “too big to fail” with the Volcker Rule. At the other extreme, some suggest a 2013 version of Glass-Steagall. Here is the short version of the facts: Proposed by former Fed Chair Paul Volcker,…

Election Economics: What To Know For The First Presidential Debate

Presidential debate moderator Jim Lehrer said there would be six 15-minute segments in the first presidential debate on October 3rd. Devoting the entire first half to “the economy,” he will also cover healthcare, the role of government, and “governing.” Like the…

Salary Secrecy

What happens when everyone knows how much you earn? A Boulder, Colorado firm, has voluntarily decided to let workers check a spreadsheet and see what others take home. One employee said she likes it, even when she discovers someone earns…

Solving Our Economic Problems

Having experienced an economic calamity, don’t we just need to figure out how to prevent it from happening again? Yes…but that might be impossible. MIT economist Andrew Lo read 21 books on the financial crisis. 11 were from academics, 10…

Election Economics: Assessing Dodd-Frank

University of Chicago professor Luigi Zingales tells the story of being asked to tape his windows during a tornado watch in Boston. A similar mandate in Italy, he said, would mean that the brother of the mayor was in the tape…

JPMorgan Chase and Financial Innovation

In Boca Raton, Florida, during the early 1990s, a group of JP Morgan bankers gathered for an “offsite” weekend. Have some fun, get some sun, do some brainstorming. They had hoped to create a new product. And they did. Their…