I was never very good at econometrics. I found the study of economics to be an intensely interesting pursuit, but I could never quite grasp the mathematical side that seems to now be an all encompassing part of the profession. From a basic level, I could understand all of the mathematical theories, but as it became increasingly complex, I found it to be increasingly convoluted and my interest levels waned.
Instead, I found the philosophical and historical side of economics to be a far more interesting and relevant pursuit. I enjoyed what was an intensely social analysis of why things were and how things would develop.
I look at our current world of cheap money with confusion.
Welcome to the Everything Boom, or Maybe the Everything Bubble
The aim of restarting global economies through cheap money has driven up asset prices for certain, but has it actually achieved the desired result of restarting economies? Are businesses booming? Are people seizing their opportunites to start new ventures?
Instead, I found the philosophical and historical side of economics to be a far more interesting and relevant pursuit. I enjoyed what was an intensely social analysis of why things were and how things would develop.
I look at our current world of cheap money with confusion.
Welcome to the Everything Boom, or Maybe the Everything Bubble
The aim of restarting global economies through cheap money has driven up asset prices for certain, but has it actually achieved the desired result of restarting economies? Are businesses booming? Are people seizing their opportunites to start new ventures?
It doesn't really seem like that is happening.
Cheap money is meant to encourage people to invest and to create new businesses. Instead, it seems that the gains that have been made have been largely through the increase in the prices of existing assets like property and shares. That isn't real economic growth. That is merely the shifting of wealth from one group to another.
So why isn't this working? I actually think that the reason is actually very simple.
People are lazy.
I should also add that they are relatively unimaginative as well. When given cheap money, the natural instincts of people will be to seek out the easiest assets to invest into. They will not be starting businesses or building labour intensive infrastructure. Instead, they seek out the easiest ways to make a return and that's through assets like shares and property. There is no work, there is no innovation, there is no development.
So why isn't this working? I actually think that the reason is actually very simple.
People are lazy.
I should also add that they are relatively unimaginative as well. When given cheap money, the natural instincts of people will be to seek out the easiest assets to invest into. They will not be starting businesses or building labour intensive infrastructure. Instead, they seek out the easiest ways to make a return and that's through assets like shares and property. There is no work, there is no innovation, there is no development.
