Someone recently asked me to explain the roller coaster in Wall-Street and other stock markets around the world. To tell you the truth, I find myself wondering the same thing as I watch "experts" on CNBC or other financial talking heads on TV. "Markets went down because the Republicans blocked what the president offered," says one pundit, while another yells out (with crazy sounds one normally associates with a local fair) "no, the market is going down because the market does not like regulations and uncertainty." After listening to all the reasons ranging from economic issues in Ireland to Dick Cheney's book as possible causes of the ups and downs in the stock market, what is an economist to do? I just turn off the TV and walk away- opportunity cost of throwing the remote at it would be too high!
So, what is the main reason? Who knows? I told the person asking me the question "to go ask a psychologist!" They might have a better idea about animal spirits.
Then, I thought of this video from TED.
So, what is the main reason? Who knows? I told the person asking me the question "to go ask a psychologist!" They might have a better idea about animal spirits.
Then, I thought of this video from TED.
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