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New links on tastes, Europe’s crisis, and more

“What It Is Like to Like”: Louis Menand in the New Yorker on tastes. Economists have differing views in their importance as determinants of prices over the long run. Crude models used by mainstream economists generally hold “tastes” (preferences that govern purchases) constant as other variables are allowed to move. Institutionalists and post-Keynesian economists have been more friendly to the idea that tastes could evolve, under the influence of advertising, mere fads, changes in the national wealth and technology, etc. More recently, models of interacting agents that feature differences among the identities of agents have made room for interesting sorts of dynamics.

But what are they how are tastes formed, especially in the age of the internet? What have we learned recently about tastes? Behavioral economists are now into the study of behavioral (psychological) determinants of our ability to satisfy our preferences; taste formation is a second behavioral issue that has garnered small but increasing amounts of serious consideration and study.

The article reviews two new books (by Virginia Heffernan and Tom Vanderbilt), but the review itself is interesting and helpful. Among the ideas discussed are that: tastes are remarkably changeable and endogenous; they are influenced by seemingly irrelevant surrounding circumstances; they come in second-order versions (preferences about preferences); and more. The open-minded will appreciate the complex insights from other fields of thought, as well as up-to-dateness on internet “likes,” the role of Big Data, etc. These issues are popping up in numerous places these days.

Debuting on our list of Keynesian and post-Keynesian blogs: Naked Keynesianism, from Matias Vernengo.

One interesting post from Matias, who has worked as a central banker in Brazil and an academic in the US, a video clip from Boom Bust Boom, the Minsky documentary we mentioned as in this previous post. I know this clip may be of interest to some of my students in a course I taught on International Financial Crises, who enjoyed occasional tips about this new cinematic genre. I mentioned the new documentary in this previous post.

Also of interest to students of financial instability, a clear explanation from Yanis Varoufakis, former finance minister of Greece, in the Journal of Australian Political Economy of the process by which the euro was doomed to fail, leading to a financial crisis in Europe. His view is a Keynesian one. The article contains an interesting argument that Europeans should be very reluctant to abandon the union, based in part on a warning that literally reversing its creation now is impossible.

This blog will soon feature a new category in its links page starting now: Some new links to interesting sites at institutions with which I am or have been affiliated:

(People do ask, after all).

Bard College:

Amor Mundi: blog of the Arendt Center: great commentary. Like the Center, inspired by the thought of 20th century philosopher Hannah Arendt.

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