Building a road might create temporary jobs, but does it really create wealth if it doesn't also shorten commute times or otherwise make society better off?
I'm a theorist, not an institutionalist.
Most of the time, your risk management works. With a systemic event such as the recent shocks following the collapse of Lehman Brothers, obviously the risk-management system of any one bank appears, after the fact, to be incomplete. We ended up where banks couldn't liquidate their risk, and the system tended to freeze up.
My first reaction on being awarded the Nobel Prize was, actually, I thought of Fischer Black, my colleague. He unfortunately had passed away. And there was no doubt in my mind that if he were still alive, he would have been a co-recipient of the Nobel Prize.
Tax incentives might spur hiring in the short run, but how lasting are those gains if the jobs expire with the tax credits and they come at the expense of investing in the new technologies of the future?
Sometimes the early bird gets the worm, but sometimes the early bird gets frozen to death.
