High-impact economists

By Zakaria Babutsidze and Mark J. McCabe

This coming Monday, October 14 2013, as many as three economists will join the elite group of winners of the Sveriges Riksbanks Prize in Economic Sciences in Memory of Alfred Nobel. The Royal Swedish Academy of Sciences is responsible for the selection of the Laureates in Economic Sciences from among the candidates recommended by the Economic Sciences Prize Committee. In early October, the Academy selects the laureates through a majority vote. Continue reading “High-impact economists”

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Setting expectations carefully

Zakaria Babutsidze

We all base certain our decisions on expectations. We buy new products because we expect that they carry certain quality, we vote for certain candidates because we expect they will do a “good job”, etc. However, recent research suggests that our expectations affect not only decisions. They also affect the level of enjoyment we derive from taking these decisions (or from experiencing their consequences). In economic terms it means that level of utility derived from the consumption of a product is affected by the expectations of the consumer. Even more technically, we say that people possess expectation-based reference-dependent preferences. Continue reading “Setting expectations carefully”

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Economic policy-making tools for pre- and post-crisis periods

by Zakaria Babutsidze and Mauro Napoletano

The worldwide financial crisis has questioned the relevance of economic models that are currently used by central bankers and macro analysts. In contrast, the recent economic events seem to be better described by models featuring boundedly rational heterogeneous agents and wherein markets do not necessarily clear at all times. Agent Based Models (ABMs) are a new class of models that embed all the above features, and therefore qualify as a promising alternative to conventional models. Continue reading “Economic policy-making tools for pre- and post-crisis periods”

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Positions of French and German Banks in European interbank lending network

by Zakaria Babutsidze

Recent desperate cries for help from French and other European banks raise the question of exactly what type and how much trouble have they managed to get themselves into. The question can be approached from many angles. Here I try to gain insights into the topic by analyzing the cross-border interbank lending network. Continue reading “Positions of French and German Banks in European interbank lending network”

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