The Map and the Territory
Page 32
regulatory quality, 231–32
regulatory reform, 100–114
principles of, 100–101
Reinhart, Carmen, 71, 348n
religion, 26, 30
rent, 242
Resolution Trust Corporation (RTC), 153, 261–62, 360n
retail sales, 55
retirement, 23
Revolutionary War, 272
risk, 5–6, 30
risk aversion, 9, 19–21, 27, 28, 39, 299
stock prices and, 77, 78, 79–80
risk management, 43–45, 46, 92, 96, 98
risk spreads, 99
Roberts, George, 126
Rockefeller, John D., 371n
Rogoff, Kenneth, 71, 348n
Roosevelt, Franklin Delano, 189, 193, 211, 235
rule of law, 233
Rumsfeld, Donald, 136
Russia, 267, 307
S&P 500, 38, 76, 242
savings, 28, 197–99, 202, 204–7, 207, 210, 212–13, 272, 292, 294–95, 367n
glut, 63
rate of, 81–82, 195–96
time preference and, 22–24
savings and loans, 352n, 355n
Scholes, Myron, 43, 44
Schumpeter, Joseph, 93, 363n
SEC, 257, 349n
Second Bank of the United States, 122
securitization, 52, 61
of subprime mortgages, 64–67
self-esteem, 33–34
self-interest, 31–32, 34
self-sacrifice, 33
Senate, U.S., 67–68
Senate Banking Committee, 266
sequesters, 247–48
serial correlation, 56
shadow banking system, 39, 41, 102, 103
shipping, 122
ships, 284
short-term investing, 76
SIFIs, 113, 263
Silent Spring (Carson), 179
silicon, 180
Singapore, 62, 267
Singh, Manmohan, 62
slavery, 31, 303
“slow thinking,” 15
Smith, Adam, 15, 91, 121, 186, 250, 307, 346n
socialism, 226–27
socialist movement, 258–59
Social Security, 11, 167, 189–90, 191, 193, 199, 206n, 212, 293
Social Security Reform Commission, 137
soft landing, 161
software, 142–43
South Korea, 62, 354n
sovereign credit, 114
Soviet Union, 137, 234, 301
Spain, 216, 218, 219, 221, 222, 225
Spencer, Herbert, 260
stability, growth vs., 101–2
stagflation, 6–7
stampedes, 26, 39
Standard & Poor’s, 46
statistical significance, 56
status, 26–27
steel, 130, 183, 246
Stern, Gary, 112
stock market, 35
stock market crashes, 80
of 1929, 100, 302
of 1987, 10, 44, 49, 71, 78, 137, 151
of 2000, 10, 49
stock option grants, 242
stock prices, 28, 38, 53, 73–74, 75–89, 152, 174, 242–43
capital spending and, 84
consistent rise in, 76–77
as contributor to changes in business activity, 80–82
home building affected by, 82
risk aversion and, 77, 78, 79–80
-to-earnings ratios, 76
stocks, 50, 270
Stockton, David, 138
Strategic Petroleum Reserves, 287
strikes, 240, 246
structured investment vehicles (SIVs), 40, 110
subprime mortgages, 49–50, 61, 63–64, 117
hidden problems of, 67–69
securitization of, 64–67, 350n
supply, 121, 250–51, 252
supply chains, 363–64n
supply curves, 33, 37n
Supreme Court, U.S., 158
Sweden, 249, 302
Switzerland, 63, 234, 267
synthetic derivative trading, 5–6, 40
tail risk, 44, 45, 102, 105, 299
Taiwan, 62
TARGET2, 220, 221
taxes, 205, 207, 247
income, 122
Tea Party, 235, 303
technology, 166–68
telegraph, 41, 123, 125, 177, 357n
telephone, 357n
Terborgh, George, 130
Tevlin, Stacey, 175
Thatcher, Margaret, 211, 212, 250
This Week, 8
Thomson Reuters, 170, 231
3–D printing, 185
time preference, 18, 21–24, 27, 165, 292, 347n, 362n
“too big to fail” (TBTF), 42–43, 51, 112–14, 261–65, 298–99, 304
Townsend, William, 130
Townsend-Greenspan & Company, 130, 132, 136–37, 246
toxic assets, 51–52
trade, 28–29, 39, 348n
trade credits, 100, 261
transistors, 180
transportation, 124, 184–85
Treasuries, U.S., 20, 70, 79, 80, 143, 147, 280, 376n
Treasury, U.S., 106, 108–9, 122, 139, 149, 190, 200, 350n
Trends in International Mathematics and Science Study (TIMSS), 244
Troubled Asset Relief Program (TARP), 106–8, 149
Truman, Harry S., 192
Truman, Ted, 138
trust, 29
trust funds, 365n
t-statistics, 56, 213, 349n
tsunamis, 287
t-values, 57
Twain, Mark, 33
uncertainty, 79, 99, 141–59, 296, 307
underemployment equilibrium, 4
unemployment, 6, 7, 8, 99, 121, 147, 162, 253
United States, 37
post-World War II wealth of, 10–11, 20
unit labor costs, 219–20
unit money supply, 275–78
urban economies, 16
values, 30–31
variance, 86–87
Veblen, Thorstein, 24
Venezuela, 267
Volcker, Paul, 135, 154, 261
VoteView.com, 235
wage controls, 97
wage rates, 162
wages, 219–20
Wald, Abraham, 4
Wall Street Journal, 124
war, 30
Washington, George, 272
Waxman, Henry, 68
welfare, 258, 260
Wells Fargo, 106–7, 357n
West Germany, 61, 250, 349n
Wharton Econometric Forecasting Associates, 132
Whelan, Karl, 175
Whip Inflation Now (WIN), 136
Wolfowitz, Jacob, 4, 345n
World Bank, 231, 232, 233, 293
World Economic Forum, 233, 268
World War II, 127, 128, 237
yield spreads, 79
zombie companies, 262–63
* Angus Maddison, The World Economy: A Millennial Perspective. Development Centre of the OECD, 2001, p. 28.
* Some affiliated funds, however, did run into trouble.
* In late 2008 the SEC published a list of stocks that could not be shorted. Its effect was minimal.
* The high marginal rates reflect the fact that the aggregate (and adjusted) level of savings for the upper income quintile since 1984 has exceeded that of total households every year by between 15 and 25 percent. The four lower quintiles combined exhibit negative savings for both the sample and adjusted surveys.
* For the upper quintile, the marginal savings rate times individual federal income tax liabilities, reduced by a small propensity (of lower income quintiles) to save Social Security benefits, measures the amount of household savings that would have funded capital investment but that has instead been diverted to social benefits that are almost wholly consumed.
* Since its peak in mid-2012, half of the trillion-euro expansion has been reversed.
* For example, the monthly NBC News/Wall Street Journal S
urvey shows this unimodal distribution of the electorate going back to 1995.
* As measured by the Census Bureau.
* Prior to the twentieth century, clipping the edges of silver and gold coins produced metal for resale, presumably without altering the face value of the coins.