The Econobubble Revisited by Yanis Varoufakis In a recent article, I discussed the 2010 Economics Nobel Prize in rather unflattering terms. However, nothing beats the decision to award the 1997 Economics Nobel to Robert Merton and Myron Scholes for developing "a pioneering formula for the valuation of stock options." "Their methodology," trumpeted the Nobel committee, "has paved the way for economic valuations in many areas. It has also generated new types of financial instruments and facilitated more efficient risk management in society." If only the hapless Nobel committee had known that in a few short months the lauded "pioneering formula" would cause a spectacular multi-billion dollar debacle, the collapse of a major hedge fund (the infamous Long-Term Capital Management [LTCM] in which Merton and Scholes had invested all their kudos) and, naturally, a bailout by the reliably kind US taxpayers.
full: http://mrzine.monthlyreview.org/2010/varoufakis261010.html _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
