Wisdom in fragments

Many entrepreneurs are deluded about their odds of success, that evidence is very clear. This creates problems… Should a government subsidise entrepreneurs who greatly over-estimate their chances of success?

Nobel Prize Winner in Economics for Behavioral Economics Research

You cannot understand entrepreneurial activity without understanding optimism. Research has shown that optimism and overconfidence in individuals is directly linked to their engagement in entrepreneurial activity.

Nobel Prize Winner in Economics for Behavioral Economics Research

Digital currency shows that anything can be money. We have become accustomed to see money as paper or pieces of gold, but in truth it could also be stones, grain, wood, cigarettes or complex computer codes.

Bubbles are driven by people piling into ideas now, that they think will make them lots and lots of money in the future. The more people that pile in, the more quickly innovation can spread... But if the capital is misallocated? then when the money meets common sense, you get a bust.

There is nothing really so bad about a recession. A recession is very much an economy pausing for breath to re-evaluate where it stands and to assess where to go next.

What crises actually do is expose the underlying fragility and structural flaws within an economy and society. Some of this is endemic – financial markets are fragile because they are giant pools of sentiment and leverage at their heart.

We always think of every crisis as being somehow different and unique to us. That is human myopia. The reality is that the perennial pattern we see is universal and immemorial.

Despite huge and on-going technological advances in electronic transactions technologies, it has remained surprisingly durable, even if its major uses seem to be buried in the world underground and illegal economy.

Economist & Harvard Professor; Former IMF Chief Economist

Another important argument for maintaining the status quo is that eliminating a core symbol of the monetary regime could disrupt common social conventions for using money, possibly in unexpected ways.

Economist & Harvard Professor; Former IMF Chief Economist

There is nothing, however, in standard theories of money that requires transactions to be anonymous from tax- or law-enforcement authorities. And yet there is a significant body of evidence that a large percentage of currency in most countries, generally well over 50%, is used precisely to hide transactions.

Economist & Harvard Professor; Former IMF Chief Economist

Paying a negative interest rate on currency, or on electronic reserves at the central bank, may seem barbaric to some... But it is arguably no more barbaric than inflation, which similarly reduces the real purchasing power of currency.

Economist & Harvard Professor; Former IMF Chief Economist

Money is a cultural abstract. It is the social, cultural and legal consensus of what a given society- at a given time- considers as being money.

Economist & Harvard Professor; Former IMF Chief Economist

...in the long-term, random investment strategies provide gains comparable to those seen where technical strategies are applied.

....by preventing extreme price variations, random investments [we] also help to identify the equilibrium price.

...adoption of random strategies diminishes the probability of extreme events (in this case large capital increases or great losses) but also ensures almost the same average wealth over a long time period, at variance with other technical strategies...

...in situations of high uncertainty, personal information exchange may reach market-wide impacts, as the examples of bank runs and speculative attacks on national currencies show.