Knightian uncertainty

The phase of Knightian Uncertainty ends soon I am going to keep it brief today because the sense I have had for the last few days is that we have finally reached a news plateau on this pandemic. The news flow is horrific, with alarming…

I am uneasy about where we are in the economic and credit cycle and the accuracy of the Fed’s forward guidance. I think we are above stall speed now. But I also think global policy divergence, slowing earnings growth and poor capex numbers…

Editor's Note: The following is the text of recent remarks on the European sovereign debt crisis made by legendary investor George Soros at the Festival of Economics in Trento, Italy.

Paul Davidson argues that a theory is the way humans describe real world observations on the basis of a model that starts with a few axioms. An axiom is an assumption accepted as a universal truth that does not need to be proved. From this…

The economy is complex in the extreme. And what economists tend to do is model it by making a few simplifying and clarifying assumptions. Here’s the problem.

Yesterday, Paul Krugman wrote: Portugal’s government has just fallen in a dispute over austerity proposals. Irish bond yields have topped 10 percent for the first time. And the British government has just marked its economic forecast…

In a recent post I discuss the limitations of neoclassical economics and the strain of behavioral economics that remains tethered to it. I argue that they fail because the market is inhabited by people, heterogeneous and context-sensitive,…