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The mystery of QE

John considers the evidence for quantitive easing as an effective driver of growth, in this short video for the FT.

Quantitative easing and the curious case of the leaky bucket

In the modern financial economy, the main effect of QE is to boost asset prices, as market gyrations of recent weeks have clearly illustrated. But is the pursuit of higher asset prices an effective or desirable means of promoting economic growth?

Darwin’s humbling lesson for business

The match between capabilities and environment is the key to the success of the tortoise. It is also the key to successful business strategy, the effectiveness of institutions, and to personal development.

For a stimulus, boring is best

The objective of monetisation has not been to put money in the hands of consumers and businesses but to put money in the vaults of banks.

Notes on a divided Europe from the Finnish frontier

To pass the watchtowers and barbed-wire fences on the Finnish-Russian border is to be reminded of how fragile, and how recent, are the stability and security we take for granted today.

Economics: Rituals of rigour

After mistaken claims made ahead of the global crisis won much academic support, long-held assumptions were called into question – but the real world often remains overlooked or ignored.

Kipling’s game theory lessons for Greece

In the dollar bill auction, one party eventually scores a pyrrhic victory and takes possession of the dollar bill. Both parties lose, but the smaller loser is the person who sticks out longest. That is not usually the rational player.

Consistency depends on the context

Consistency is the defining principle of rational choice theory. John looks instead to Ralph Waldo Emerson 'a foolish consistency is the hobgoblin of little minds'.

The beauty is in the data

The share of financial services in national income has increased. Should we be pleased, or concerned, by this development?

Don’t blame luck when your models misfire

We will succeed in managing financial risk better only when we come to recognise the limitations of formal modelling. Control of risk is almost entirely a matter of management competence, well-crafted incentives, robust structures and systems, and simplicity and transparency of design.