Economic Perspectives

Econometric Optimization of Fresh Start Policy


"What is the optimal consumer bankruptcy law?" Now that's an abstract first line that grabs my attention! I've thought about this question for most of my academic career, and I've struggled to find solid bases for an answer. Now, Indiana Univeristy economist Gray Gordon offers an intriguing if difficult to understand possibility.




Some thoughts on how much faith we should have in the debt markets, and whether they are actually markets at all, over at Dealb%k.


The Behavioral Economics of Bitcoin


I'm going to wade into unchartered Slips waters today and head into Bitcoinland. I've been trying to understand Bitcoin from a payment systems perspective, where it has an interesting problem and solution:  double spending.  The lesson in all of this is how Bitcoin has a sort of built in seniorage--payments are never free. Currently Bitcoin builds in its costs through inflation, which is not particularly transparent, but that will ultimately change to being more transparent--and salient-- transaction fees.


Most Politically Tone-Deaf Statement of the Year?


I'm quite sure China's plea to “ensure the safety of the Chinese investments” will bring certain members of of the House to their senses. 


Why Is the Fed Chairman a Bank Regulator (or an Economist)?


The NY Times has a pretty significant error in its reporting on the Summers vs. Yellen Fed Chair race. It says that Yellen was the head of the Federal Reserve Bank of San Francisco, which was Countrywide's regulator. That's wrong. FRBSF was never Countrywide's primary regulator. That was the OCC and then OTS.


Legal Solutions to Non-Legal Problems


Again, this is me posting on Adam Levitin's behalf because he is away from Internet access as he owns an Apple computer (often a redundant statement). Adam writes:

Glenn Hubbard and Tim Kane have an op-Ed in the NYTimes proposing a federal
balanced budget amendment as the solution to federal deficits. 


Another Myth of Consumer Law?


As the CFPB gears up to regulate arbitration clauses,
a timely article by Omri Ben-Shahar has been posted on ssrn.


Vermont Employer uses Behavioral Economics to Turn Debt into Wealth


Some readers might enjoy this PBS video about a Northern Vermont company that helps people weather financial storms with small loans. Rhino Foods in Burlington found that employees in financial strain were not as good at their jobs and that the small loans improved the company’s bottom line.  Rhino brought in a combination social worker/financial advisor, who helped arrange 17% income advance loans paid back through wage deductions.