[Pen-l] ASSA convention (I)

["Jim Devine" <jdevine03@xxxxxxxxx>]

At the recent economics convention, there were at least two papers of note.

Randy Wray presented a talk on the current financial crisis. As usual,
his talk was extremely interesting and useful. Crucially, he pointed
to a simple explanation for the roller-coaster behavior of the markets
for commodities (oil, etc.) in recent years. Organizations such as
pension funds were allowed by deregulation not only to invest their
funds in commodities, but in commodity futures. Like fools, they
rushed in, buying oil futures and the like. This drove prices very
high. Then then pulled their funds out, having an obvious negative
effect on prices.

This explanation, as I see it, is more satisfying than simple
reference to speculation: first, the _new_ speculators rush in (with
new money) and then they rush out.

I'll talk about the other talk some other time.

-- 
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
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