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What did the existence of low inflation and low unemployment in 1900s puzzle some economists?
Wiki User
∙ 12y ago
Because unemployement fell to its lowest level in decades, and inflation crept along at less than 3%
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∙ 12y ago
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What are the major economic problem of region 9 in the philppines?
Major economic problems of the Philippines are the relocation of the people who suffered typhoon Yolanda, unemployment, illegal drugs and corruption. These economic problems are still a huge puzzle for the government on how it will be solved.
What are the next two words in the sequence of Edition hand degree estate gear?
sense, heaven. Its easy- its a word puzzle- first edition, second hand, third degree, fourth estate, fifth gear............
Will Iraqi dinar revalue before 2011?
Good question, Like all the other times we thought the revalue was near, it turned out not to be so, there was always something that delayed revalue, but with so many of these past obstacles finally resolved, it is looking real good at this point in time that we will all have a Merry Christmas. With last few pieces of this complicated puzzle finally coming together, and after nine plus months to get final parliament seated, unheard of delay for any other government, but in Iraq, the sectarian divide has delayed normal progress on all fronts. Is this political mess finally settled, looks to be, but as we have all seen in the past, something always gets in the way at the last minute. The positive side was that when parliament met, this is the first time all members appeared, not one was absent, a first. Is this the real tip off that the deal is done, in my seven years researching it, yes, this was the strongest signal of all that this decision is final with no more obstacles left. So my answer is yes, we will see the revalue on Christmas, but it might not be this Christmas. lol Just kidding, you have to laugh when it comes to Iraq, what I have learned over all these years following this is that these people in power are a joke, so they have learned well about democracy from the biggest jokes of all times, the U.S. politicians in power. LOL Success to all, FREE-FUNDRAISERS
Why are economic theories formulated when they are not exact?
It is very discouraging to have to learn a bunch of stuff in school that has little or no use or practicality. The people that run schools almost never tell you BEFOREHAND that what you are learning is of little or no value. This is because they are running a business, and they are afraid that if they tell you that what they are teaching is useless, that you will drop out of their program and not pay them any more money.All knowlege is potentially false. All knowlege is false TO SOME DEGREE. This may seem unreasonable, but recall that only a few hundred years ago, it was "common knowlege" that the world was flat. Anybody who argued for any other shape was not only called an idiot, but often persecuted or even sometimes killed for their beliefs.Currently, it is very difficult to know why certain things work the way that they do. Economics and religion deal with particularly difficult to understand arenas. If we don't make ANY theories on these subjects, there can be no advancement of knowlege and learning. Because of the difficulty in understanding these subjects, we are not nearly as skillful in imagining possibilities yet. When we have had a few hundred years of practice in imagining alternative possibilities, our theories about economics and God will be much more useful than they are now.About the only use economic theories provide at the present time, is as an opportunity to examine how other people have thought about the subject so far. If you can examine another person's thinking, and spot flaws in their logic or their reasoning, then you can come up with a better description of what is going on. In this way, you will be helping to improve the thinking on the subject and just as WikiAnswers might help make it easier to find the answers to questions, you might make it easier for others to understand economics.Business people have to make decisions with poor and inadequate information all the time. Fortunately, poor and inadequate information is usually not completely fatal to a small business. It is somewhat better to work with a consistent strategy than a random one. This is almost always the case in a computer game, for instance. The implication is that even if your strategy is flawed, inferior or even just plain NUTS, it is STILL better than either NO strategy, or a strategy that is changed constantly. Look to the stock market for evidence of this statement.Picking a direction almost always leads to results that are better than refusing to even guess. While economists would be insulted by this description of their "work", it is helpful to recall that even during OUR lifetime, continents were considered "fixed", and while even though a 4th grader could see plainly that Africa and South America fit together like nearly perfect jigsaw puzzle pieces, it was considered laughable to think that continents ever "moved". Now, the science textbooks have been changed, and "everybody" KNOWS that continents move, even though nobody has ever actually SEEN it happen (we die too soon).Don't take the preachings of the inexact sciences too seriously, just pass the test and forget the material. Be glad that you don't have to memorize thousands of magic formulae as the old alchemists did. Totally worthless effort, except for when they got something right...An example of two theories that can't both be right in TODAY'S world are Black Holes and the Big Bang theory of the creation of the universe. Imagine a big massive object. According to the Black Hole theory (as it currently exists), all the matter gets crushed to a tiny fraction of its previous size, and even LIGHT can't escape!Now, imagine an even BIGGER, many times more massive object! The entire universe! If it was as small as a tiny pinprick, then it should have been so dense that NOTHING could ever have escaped its gravitational grasp! It should be the MOTHER of all Black Holes! So, how is it possible then, that almost all astronomical scientists embrace BOTH of these theories as true? Someday, one or the other theory will have to be altered substantially, as they can't both be true as they are currently conceived. The one that gets altered is going to be considered false from that point on. Until then, you will be laughed at, for saying that either theory is false.All good scientists will admit that theories don't prove anything. They are simply the best model discovered to date that fits all the facts that we currently have available. As we obtain more facts, we must change and revise what we believe. The scientist generally does this more graciously than other human beings, because they don't usually think that they have all the answers. It is painful to refute an entire lifetime of work and effort, but a good scientist will do it in a heartbeat if one scrap of evidence arises that shows that what he preached as gospel yesterday is now found to be nothing but hot air. In this way, science can progress. If we fail to let go of false ideas and teachings, then we doom ourselves to repeat the mistakes of previous generations for the rest of our lives. Part of a good education entails realizing that we are routinely taught false and useless information, and that we must learn to discern this for ourselves and practice PRUDENT skepticism about anything we hear.Your life may very well depend on this in the next year or two. Does the vaccine offered to you actually help prevent the swine flu or doesn't it? Oddly, the answer is not the same for everyone. There is absolutely no doubt that the vaccine will kill some of the people some of the time. It is your job to determine whether or not your chances of survival are better or worse if you accept it. If you fail to get it right, you won't produce any more offspring, and the collective intelligence level of the remaining population will rise. Nature is harsh, but ultimately, quite fair.
Evolution of The field of Finance?
Today's Finance is still in its infancy as a science. The domain of what we know pales in comparison to what we actually know we don't know. For example, we know that our understanding of the basic mechanisms of asset valuation (stocks, real estate, gold) is limited, confused and non-operationalfor the most part. Who can tell and predict the value of stocks today? Investors are offered conflicting views (rational vs. irrational), quick recipes, and voodoo advice. The "pseudo" scientific mathematical models that are offered today, far from resolving real-world problems do revel in their own complexity in exchange for minor incremental learning. Below, I am addressing several outstanding issues in Finance. Let me give you a few examples of major unresolved issues:· The CAPM dead or alive? Over the last few decades one of the most prominent model of Finance called the CAPM has been under attack, not because its logical foundations are wrong or limited, but rather since it does not explain returns, the way it was intended to: higher contribution to systematic risk leads to higher returns. Noteworthy, is the French-Fama (1992) paper showing that price to book is a better predictor of stock returns than beta. Now, we can accept that an essentially static model created about 40 years ago can fall short of explaining reality. Maybe the reason is that we are not capturing expected returns properly. Recently, there have been new attempts to validate the model (for example showing that a form of inflation illusionhas an effect on the Beta-expected return relationship (Cohen, Polk and Vuolteenaho (2004)), or that the French-Fama result can be explained by incorporating leverage as a factor, thus rendering the beta effective again (Ferguson and Shockley (2003)). These results may be incrementally informative but it is important to know if the stream of new insights about CAPM is fundamental enough to repair the model.· Beta only a measure of risk? Beta measures the contribution of a single stock to market volatility. One of the confusing piece of language about it is that it is supposed to represent risk. However, in some instances it may rather represent growth. For example, since the stock market moves upward in the long-run, and market returns are positively serially correlated (low frequency data), then a high beta stock may in fact capture a boost to the average market return due to faster than normal growth (in earnings). The extra premium is not for risk but for growth. Here are some new views about redefining the standard CAPM model in terms of beta linked to downside risk (Kaplansky (2004) or Post and Van Vliet (2004)).· What about those macro-finance models? Since the static model has not done so well, what about the dynamic models? These have not fared better since the middle of the 1970's (essentially since the works of Merton (1973) and Lucas (1978). Both are Nobel laureates in Economics).· Valuation of stocks, anyone? The standard dividend discount model taught in our schools (and many variations on it) has not borne its fruits. Stock prices MUST be based on the present value of expected future cash flows accruing to investors (Warren Buffett concurs). The questions are: 1) Are these cash flows adequately represented by forecast dividends or proxies? 2) How do we account for expected price appreciation independently of future dividend proxies? 3) How can we narrow the choices for the right discount rate(s) and other inputs to apply to these models? Still, it appears that demand often forces prices to temporarily diverge from a present value calculation due possibly to "irrational exuberance", then 4) How fast does the reversion mechanism to fair value operate (if any)?· Is the stock market rational or irrational? This is a very confusing issue since the latest conventional wisdom is that the stock market is mostly irrational (Shiller 2001). In fact, it is probably a mixture: an undercurrent of fundamental value plus superimposed short-term deviations due to irrational behavior and/or news. Let us be careful though, one reason why markets are seen as irrational is that Finance has been unable to provide a logical/mathematical foundation to valuation since the current models have fallen short. Thus, our definition of "rational" is contained within the rationality of the models we have so far developed. The core guiding principle of investors' decisions may very well be founded on economic laws (systematic and reproducible) left to be discovered…· What are we (investors) to do? If markets are irrational what is there to learn about investing in stocks? Are we investors supposed to throw in the towel when there is no solid ground on which to make a stock investing decision? Maybe some investors can capitalize on the irrationality of other investors? (Contrarian trading: Am I irrational or is she?). On the other hand, you'll say there is always the motto of Value Investing: buy companies for which you understand the business model, scrutinize the financial statements, do they have a good cash position, low PEG, etc… There is no argument that these factors can contribute to good stock selection. More to the point though: an entire industry has sprung-up not necessarily caring about how stocks are truly valued. Yes, I'm talking about the mutual fund industry. How so? The industry creates portfolios with particular flavors: Growth oriented, Large caps, Small caps, Blends etc... The game in town is product differentiation and finding a market niche. A marketinggame! Since no one truly understands the pricing of stocks, mutual fund managers attract investors by promising to replicate 'good' past records, or to generate great returns based on the fund's investment style (an oxymoron). Since portfolios are turned over to dump losers and buy winners (often late), these outfits are not in the business of fully understanding stock valuation but rather in the business of maintaining or growing their fund participation by minimizing quarterly losses and riding the growth endemic to a capitalistic economy.· The (in)famous Equity Premium puzzle. The Equity Premium (EP) is the difference between the stock market return and a Treasury yield (also referred to as risk free rate). Now, if there were an equivalent to the speed of light in E = MC2, as applied to the valuation of most assets, this would be the EP. However, the EP is typically not constant over time. It is what economists call counter-cyclical: it rises during recessions and lowers during booms. Now, since stocks are riskier than bonds in the short-term, following the CAPM logic they should pay a higher return. Thus, the EP should be explained by risk avoidance. However, the current macro-economic and finance models are unable to confirm this intuition, since (not to bore you too much) the size of actual equity premium does not reconcile with what the models need to assume for the level of risk aversion in the economy. Recently, Bansal and Yaron (1994) have had some success in reconciling our economic models with the ctual size of the premium. However, their solution is a bit strange: in order for their result to hold investors have to be worried about minute variations in long-term GDP growth, by an order of few basis points (1% of 1%)!· Stock returns that compound faster than economic growth? No kidding! Current theories accept that compound equity returns have been around 11% nominal in the long-run. This far outpaces the nominal GDP growth of the US economy about 6.5%. Imagine a savings account paying 11% when the bank's profits only grow at 6.5%… Why are current theories endorsing this result? Well, the key to this gap is that the equity compounded return calculation assumes that dividends are fully reinvested period after period. A single investor may be able to do this for a while as he/she can increase their market share, but since aggregate stock wealth cannot grow faster than GDP in the long-run, all investors at large cannot do that. The pricing of stocks must incorporate a relationship to feasible wealth compounding. Right now, the current theories do not link returns to GDP growth in a convincing manner.· Loving or fighting the Fed model. The Fed model (Orphanides and al. (1997)) is highly controversial. Many practitioners love it (see Dr. Yardeni's page); academic pundits hate it (Asness (2003)). The Fed model is the result of a discovery that the SP 500 forward earnings yield is highly correlated with the 10- year Treasury yield, since the 1970s. This is the best working model we have for the SP 500. Academics believe the model is logically flawed, based on thinking that the earnings yield is a real rate of return. Yes sure, how can you compare a real rate to a nominal yield? Since the Fed model is flawed, the observed correlation must be a fluke and since reality violates our current accepted theories, then reality must be wrong! (This is an actual quotation!) Well, try to tell that to practitioners! We must attempt to better understand why the Fed model works.We need to view ourselves much more like engineers or physicians, in our capacity as social scientists. We are living in exciting times, the science is young, the questions are still open, novel thinking and scientific breakthroughs await us.Dr. Christophe Faugere is an Associate Professor of Finance at University at Albany School of Business Chair of the Finance Department. His research attempts at solving some of the challenging issues presented above. Please visit his website at wwww.albany.edu/~faugere.
What is the book of sand puzzle answers?
The book of sand puzzle in the book "Fictions" by Jorge Luis Borges does not have a definitive answer. It is meant to be a metaphor for infinite knowledge and the futility of trying to comprehend it. The story leaves the reader to ponder the implications of the infinite nature of knowledge and existence.
What evidence is there for pangea?
One of the major evidence for the existence of Pangea is the shape of the continents. For instance, it looks very much like South America and Africa would fit together like two puzzle pieces.
Who dies puzzle?
There is not a way to die a puzzle. A puzzle can only be put together.
What is the answer to puzzle 60 Plaza Puzzle in Professor Layton and the Diabolical Box?
Puzzle NO 60: Plaza Puzzle, Location, Station Exit. Please see the Related link below for a walkthrough of the puzzle.
What is the burmese word for Puzzle?
The word for puzzle is "pahei" (pəhèi) (n) -- puzzle; riddle
What were those old puzzle games with the movable squares called?
They can be called a sliding puzzle, sliding block puzzle, or sliding tile puzzle.
What are some popular puzzle game's?
Some of the most popular puzzle games include Sudoku, Scramble, picture puzzle, crossword puzzle, grid puzzle, rebus, marbles, Chinese puzzle and many other games and variations of the mentioned ones.
Which puzzle was introduced in 1832?
crossword puzzle
How do you solve the garatna puzzle?
which puzzle is that which island is it on
How do you say puzzle in french?
un puzzle
What s the wood from a monkey puzzle used for?
to un-puzzle the puzzle ps pluto corndog
What is answer Professor Layton and the Lost Future puzzle 112 ladder puzzle?
Puzzle No 112: Beams and Ladders (US) or Ladder Puzzle (UK) Please see the related link below for a walkthrough of this puzzle.
