Those trying to understand the tariffs as economic policy are dangerously naive.
No, the tariffs are a tool to collapse our democracy. A means to compel loyalty from every business that will need to petition Trump for relief.
1/ A 🧵 to explain his plan and how we fight back.
I strongly recommend to read Shai's piece on the Boston Review, and follow @molad-institute.bsky.social, who are finally on bluesky!
Some of the words banned in different government agencies, brought to you by the great champions of free speech.
The opposition to continuing the hostage and ceasefire deal presents itself as the voice of logic. In reality, it promotes a distorted, illogical view of responsibility and the state's role.
My new op-ed in Haaretz.
www.haaretz.com/israel-news/...
המתנגדים לעסקת החטופים אוהבים להציג את עצמם כמי שמייצגים שיקולים רציונליים – ואת תומכי העסקה כמי שנכנעים לרגש. אבל האמת היא שהתפיסה שלהם, אליה הם מתייחסים בתור ״קול ההיגיון״, היא לא פחות משכתוב תפקידה ההיסטורי של מדינת ישראל.
טור חדש שלי ב״הארץ״.
www.haaretz.co.il/magazine/the...
I did a NYT video interview—along with voices from Hungary, Nicaragua, and Russia— about how repression works in authoritarian states.
www.nytimes.com/video/opinio...
**New working paper**
How does the under-representation of females in Economics affect the career trajectory of female Ph.D. students?
Sahar Parsa and I look at this in a new working paper by exploring sabbatical leaves taken by female professors at top-50 US Econ departments.
Ran Spiegler has a new book out that I found very entertaining.
It's a collection of essays offering accessible introductions to modern classics of economic theory: global games, Bayesian persuasion, hold-up problem, competitive screening, ...
And it's FREE!
direct.mit.edu/books/oa-mon...
In economics, editors, referees, and authors often behave as if a published paper should reflect some kind of authoritative consensus.
As a result, valuable debate happens in secret, and the resulting paper is an opaque compromise with anonymous co-authors called referees.
1/
I recently decided that I want to become "that person", here for the recommendations!
Well summarized in the thread. It’s a treat — explains some of the dissonance.
drive.google.com/file/d/1No3h...
Very nice JMP that might inspired experimentalists to revisit some of the classic results in experimental asset markets. Note the predictions that are distinct from those derived from the Harrison-Kreps style models of overpricing. #econsky #econjmp
It has been a while since I wanted to sit down with a hot cocoa and a working paper. The atmospheric river and this job market paper on Dynamic Cursed Expectations have me there. ☕️📄
Thanks for the comment! We surely could take into account that the realized price will carry new information, but the experimental literature shows that it might be hard. Ngangoué and Weizsäcker show this difference in behavior with limit orders vs observed prices
www.aeaweb.org/articles?id=...
Brilliant idea, explained simply. Will definitely read the paper and think about how to use it in my work.
הלוואי שזה עלי! אתמול קראתי פוסט על איך מתישהו מגיעים למצב של אדישות. אני עוד לא שם לצערי אז לא יכולה להעיד
And here is a link to paper! #EconSky
drive.google.com/file/d/1No3h...
My student and coauthor Shani Cohen is on the job market!
bsky.app/profile/shan...
My favorite kind of behavioral economics. Take a simple deviation from the standard properties of learning and explore all of its strategic implications.
the true return distribution is a mean-preserving spread of the one that agents in DCEE use.
Dynamic Cursed Expectations are defined for a general framework and can be applied to many different models of competitive markets, including a variety of applications in macroeconomics and finance. 15/15
This application suggests that asset overpricing can come from underestimation of the risk. When ‘good things go together’ and ‘bad things go together’, neglecting those correlations makes the agent consider a ‘less risky’ distribution: 14/
In DCEE, I would neglect that correlation. I would be correct about the marginal distribution of Tuesday’s price, and about the marginal distribution of Wednesday’s dividend, but not realize that the two are correlated. Under risk aversion, that leads to overpricing of the risky asset. 13/
The price they are willing to pay is correlated with the asset value: if Tuesday’s resale price is high, the dividend pay on Wednesday is also likely to be high. Hence, my risk is correlated. If Tuesday’s resale potential is bad, Wednesday’s prospects are also probably bad. 12/
Information is released over time, thus potential buyers on Tuesday are more informed than I am today about the asset dividend. 11/
Suppose that I buy a risky asset on Monday and think: I can either sell it on the market on Tuesday, or if Tuesday’s price does not look great, I could keep it and get a dividend on Wednesday. 10/
Overpricing comes from speculative motives, with the following intuition ->> 9/
What are the implications for behavior in markets?
I define the corresponding equilibrium concept, Dynamic Cursed Expectations Equilibrium, and show that in an asset pricing model, it leads to (1) trading where rational agents would not trade, and (2) overpricing of risky assets. 8/
