Economics Archives

Efficient Market Hypothesis: Explained With Counterarguments

How a Passive Investment Strategy Wins Big

How is the efficient market hypothesis explained by experts? What does it mean, and what are some counterarguments? The efficient market hypothesis, explained by financial experts, concludes that securities are always priced accurately due to the nature of the market. By understanding this hypothesis and the counterarguments to it, you’ll have a better understanding of how markets work. Learn more about the efficient market hypothesis from all angles.

The Dotcom Boom and Bust: Feedback Loops and Bubbles

What caused the dotcom boom and bust? How does the theory of speculative bubbles explain what happened? The dotcom boom and bust was caused by feedback loops in which investors responded to increasing prices by pushing prices even higher. To understand how this happened, we need to take a closer look at each factor that influenced how investors speculated. Continue reading to learn what caused the dotcom bubble to form and then burst in the early 2000s.

Speculation and the Stock Market Crash: A Look at Media Influence

What’s the relationship between speculation and the stock market crash? How did the media influence investors? In both 1929 and 1987, speculation and the stock market crash were deeply intertwined. A look at media coverage at the time shows how speculation set the stage for each crash. Let’s consider how speculative bubbles influenced by the media led to major stock market crashes in history.

Closing Pharmacies Across the US Spark Panic

Why are many US pharmacies closing? What does that mean for the local communities? Major pharmacy chains like Rite Aid, CVS, and Walgreens are closing hundreds of stores, creating “pharmacy deserts.” Continued pharmacy closures could exacerbate healthcare disparities, necessitating new approaches for equitable access to vital medications and health services in all communities. Continue reading to learn about the reason for the closing pharmacies and the potential effects.

Robert Shiller’s Narrative Economics: Overview & Takeaways

What can we learn about economics by taking a “narrative” approach? How can such a perspective help us predict future economic events? Robert Shiller’s Narrative Economics acknowledges that numbers and statistics often take center stage in economics. But, we often overlook the influence of narratives and popular ideas. The book shows what we can learn about economics when we consider these additional factors. Continue reading for an overview of this book that encourages us to look broader and deeper to understand our world.

Robert Shiller: Bitcoin’s Value Is Tied to Its Narrative

Do you own Bitcoin or other cryptocurrency? Is investing in Bitcoin a good idea? According to Robert Shiller, Bitcoin provides an excellent example of the power of an economic narrative. He explains the fascinating Bitcoin narrative within a larger discussion of how we understand and predict economic behaviors in a qualitative rather than quantitative way. Read more to learn about the Bitcoin narrative and why it’s compelling to so many.

Economic Growth of the 1920s and 1950s: New-Era Thinking

What caused the economic growth of the 1920s? In what ways was this similar to the 1950s economic boom? The economic growth of the 1920s and the 1950s economic boom was caused by “new era” economics, a mindset where investors began to believe that market growth would continue for a long period of time due to cultural changes. To understand why these booms happened, you need to understand this mindset. Learn what caused the economic growth of the 1920s and 1950s and how new-era thinking contributed.

What Makes Something Go Viral? 5 Reasons Ideas Catch On

What makes something go viral? Why do some ideas catch on when others don’t? Economist Robert J. Shiller contends that narratives drive behavior far more than we might realize. He outlines five factors that contribute to the widespread dissemination of economic narratives: memorable visuals, emotional resonance, influential endorsers, holistic explanations, and a human-centric focus. Continue reading to understand these virality factors that apply to narratives of all kinds.

Stock Market Speculation & the 2 Types of Psychological Anchors

What causes stock market speculation? How do psychological anchors influence investors? Stock market speculation is influenced by psychological anchors, both quantitative and moral, which ground an investor’s decisions even more than recent news about company performance. Taking a look at how these anchors work gives insight into why certain stocks grow and when. Let’s take a look at how quantitative and moral psychological anchors and how they influence stock investors.

Gold Standard vs. Fiat Currency: Is the Issue Just Psychological?

Which is better—the gold standard or fiat currency? Could you make a sound economic argument for your position? In Narrative Economics, economist Robert J. Shiller argues that human beliefs and actions, rather than numbers and statistics, ultimately drive economics. Specifically, he writes that beliefs about the gold standard are part of a recurring American economic narrative. Read more to learn Shiller’s take on the gold standard vs. fiat currency debate.