Friday, March 21, 2008

Economizing and Strategizing

So, here I go, testing this Weblog system . . .

Oliver Williamson, the great contemporary economist, notes that there has been too much focus on triangles formed by supply-demand curves, i.e. on strategizing, and not enough attention on the larger rectangles, i.e. on economizing. A good place to read about this is in his book of essays on transaction cost economics, Mechanisms of Governance.

Saturday, March 15, 2008

Time and Transactions

Tehran Bazaar (August, 2006)
Originally uploaded by M.Mortazavi
In each minutes, a tremendously large number of transactions are carried out.

Only economies that improve the volume and value of such transactions per quanta of time and resources used will survive well in crisis.

Friday, March 14, 2008

Fear in the Minds

I find this paragraph from a Financial Times editorial published today telling a big story:

It would be pointless, foolish and wrong to try and fix the dollar at its current level. Markets are the best way to determine exchange rates, and on a trade-weighted basis it is far from clear that the dollar has overshot its fair value. But what intervention might do is slow the decline, by putting fear in the minds of momentum investors who are selling short on margin.