Monday, February 28, 2011

Econspeak

The Ancient pointed FLG to this presentation at MIT, and God bless him for thinking FLG could possibly understand remarks that are prefaced with statements like this:
We already started with a consumption function that depended on transitory and permanent income, a channel from interest rates to consumer durables, and a real net wealth effect a la Franco Modigliani.

Although, in all seriousness, the specific remarks prefaced by that statement did contain this one sentence that FLG understood. When answering a rhetorical question of why the dot com bust wasn't as bad as the current housing crisis, Great Depression, or Japan's relatively recent troubles it was short and sweet - leverage.

FLG has been playing that tune for a long, long time.

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