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Fischer Black's *Exploring General Equilibrium*
Coming out in paperback, March 2010, for only $20. You can pre-order now.
Mostly it's Black's views on business cycles, growth, and equilibrium. It's not an easy book for most people to read, as Black just comes out and states what he thinks, without much in the way of trappings or preliminaries or traditional narrative structure. There are also no models, just strings of statements about models. That said, virtually every sentence has substance. It is one of my favorite books in economics and it still contains many unmined insights. I'm tempted to order an extra copy, just for the pleasure of buying it.
Posted by Tyler Cowen on December 29, 2009 at 03:46 PM in Books, Economics | Permalink
Comments
" I'm tempted to order an extra copy, just for the pleasure of buying it."
Pretty bizarre statement, no?
HC
Posted by: Happy Camper at Dec 29, 2009 8:25:11 PM
Retail therapy.
Posted by: CThorm at Dec 29, 2009 8:39:17 PM
When I was in between jobs I had a "great idea" that involved Fischer Black's view of interest rate as options, and a neoclassical model of a capital-using economy. At this point though it's like trying to explain a really neat dream you had to somebody else and it sounds dumb in the daylight.
Posted by: Bob Murphy at Dec 29, 2009 8:59:05 PM
At this point though it's like trying to explain a really neat dream you had to somebody else and it sounds dumb in the daylight.
Did you ever figure out why it "sounds dumb" now? I know that dreams sound dumb when explained because we're forced to confront non-sequitirs and inconsistencies that our minds glossed over while the dream was in progress. However, I'm assuming that your idea didn't have any such obvious flaws. So, what makes it sound so dumb today?
Posted by: quanticle at Dec 29, 2009 10:53:14 PM
Fischer Black is the only economist of note over the last 50 years (if not longer). read Bradford Cornell's "The fundamental nature of recessions: a contracting and restructuring perspective" to get a flavor of how insightful Black was.
Paul
Posted by: paul at Dec 30, 2009 9:28:17 AM
Did you ever figure out why it "sounds dumb" now?
Well, "sounds dumb" might not have been quite right. What I meant was, when I was reading Black's collection of essays, and hit the one on interest rates as an option, I made an intuitive connection between the major project I was grappling with at the time. Namely, I was trying to enter the finance world as an economist with a dissertation in capital theory, and so I was trying to come up with a paper where I linked up standard finance papers explaining interest rates as random walks or whatever, with standard GE econ models explaining interest rates as the marginal product of capital. I thought I could provide more constraints on how interest rates evolved over time, by bringing in "knowledge" from macro econ models.
So anyway Black's approach to interest rates clicked with me and made me think I was on the right track, but then I got a job offer and it's 4 years later and I can't really remember what my brilliant insight was. :(
Posted by: Bob Murphy at Dec 30, 2009 11:11:21 AM
I realize that Tyler gets a rash every time anyone mentions Hayek, but based solely on Cornell's article I don't see how Black's theory of cycles is any different from Hayek's. See especially Hayek's "Economics and Knowledge" from 1936. Hayek's main point was that the production of capital goods must coordinate with the demand for the consumers goods which the capital goods are intended to make. Savings and prices do the coordinating.
Posted by: fundamentalist at Dec 30, 2009 6:03:17 PM
I realize that Tyler gets a rash every time anyone mentions Hayek, but based solely on Cornell's article I don't see how Black's theory of cycles is any different from Hayek's. See especially Hayek's "Economics and Knowledge" from 1936. Hayek's main point was that the production of capital goods must coordinate with the demand for the consumers goods which the capital goods are intended to make. Savings and prices do the coordinating.
Posted by: fundamentalist at Dec 30, 2009 6:03:47 PM
I realize that Tyler gets a rash every time anyone mentions Hayek, but based solely on Cornell's article I don't see how Black's theory of cycles is any different from Hayek's. See especially Hayek's "Economics and Knowledge" from 1936. Hayek's main point was that the production of capital goods must coordinate with the demand for the consumers goods which the capital goods are intended to make. Savings and prices do the coordinating.
Posted by: fundamentalist at Dec 30, 2009 6:04:20 PM
In the BigThink interview of Peter Thiel they posted a week or so back, Thiel had an interesting take that inflationary regimes were basically for a "people are all good" view while deflationary is for "some people are good and some are bad."
It seems we've been trying The Fed/Government rain money down and let the market sort it out for a while, and when some people fail, rain more money down. I wonder when the statists will come to the realization that their policy is based on an absurdly extreme version of the efficient market hypothesis.
This seems relevant by the way, because it is The Fed efforts and government direction that are basically in contravention to what you say about Hayek and apparently Fischer believing that the structure of credit should actually coordinate with what is being saved to purchase (what a concept!).
Posted by: Andrew at Dec 31, 2009 5:50:53 AM
