Saturday, January 25, 2014

Economy

Walmart to cut 2,300 Sams Club jobs.

Top investment firms don't pay attention to establishment macro-economics because their models don't work in the real world.
"Blogger Noah Smith recently did an informal survey to find out if financial firms actually use the “dynamic stochastic general equilibrium” models that encapsulate the dominant thinking about how the economy works. The result? Some do pay a little attention, because they want to predict the actions of central banks that use the models. In their investing, however, very few Wall Street firms find the DSGE models useful.
I heard pretty much the same story in recent meetings with 15 or so leaders of large London investment firms. None thought that the DSGE models offered insight into the workings of the economy."
But rulers rule.

No comments:

Post a Comment