The Price of Everything - Eduardo Porter [144]
229-233 When Prices Go Off the Rails: Data on AOL’s purchase of Time Warner draws from Saul Hansell, “America Online to Buy Time Warner for $165 Billion,” New York Times, January 11, 2000. The discussion of the seventeenth century’s financial bubbles and the United Kingdom’s Bubble Act draws from Kevin Lansing, “Asset Price Bubbles,” Federal Reserve Bank of San Francisco, Economic Letter, Number 2007-32, October 26, 2007; and Peter M. Garber, Famous First Bubbles (Cambridge, Mass.: MIT Press, 2000), pp. 50-64. “The South-Sea Project” is in The Poems of Jonathan Swift, Vol. 1 (London: William Ernst Browning, 1910), pp. 198-207. The description of new high-tech mortgages and the boom of mortgage-backed securities is in Jane Dokko, Brian Doyle, Michael Kiley, Jinill Kim, Shane Sherlund, Jae Sim, and Skander Van den Heuvel, “Monetary Policy and the Housing Bubble,” Federal Reserve Board, Finance and Economics Discussion Series, December 22, 2009. Keynes’s description of the reverse beauty contest is in John Maynard Keynes, The General Theory of Employment, Interest and Money (New Delhi: Atlantic Publishers, 2006), p. 140. Charles Prince’s view of dancing is reported in Michiyo Nakamoto and David Wighton, “Citigroup Chief Stays Bullish on Buy-outs,” Financial Times, July 9, 2007.
233-236 Should We Pop Them?: Discussion of the potential social, economic, and political fallout from the financial crisis of 2008 draws from Fernando Ferreira, Joseph Gyourko, and Joseph Tracy, “Housing Busts and Household Mobility,” NBER Working Paper, September 2008; Philip Oreopoulos, Till von Wachter, and Andrew Heisz, “The Short- and Long-Term Career Effects of Graduating in a Recession: Hysteresis and Heterogeneity in the Market for College Graduates,” NBER Working Paper, April 2006; and Markus Brückner and Hans Grüner, “Economic Growth and the Rise of Political Extremism: Theory and Evidence,” CEPR Discussion Paper, March 2010. The debate over whether bubbles should be popped draws from Brad Delong, “Sympathy for Greenspan,” Project Syndicate, June 29, 2009 (at www.project-syndicate.org/commentary/delong91); Kevin J. Lansing, “Speculative Growth, Overreaction, and the Welfare Cost of Technology-Driven Bubbles,” Federal Reserve Bank of San Francisco Working Paper, August 2009 (www.frbsf.org/publications/economics/papers/2008/wp08-08bk.pdf, accessed 08/08/2010); and James Edward Meeker, The Work of the Stock Exchange (New York: The Ronald Press Company, 1922), p. 419. The tally of countries that have escaped banking crises is by Carmen Reinhart and Kenneth Rogoff, “Banking Crises: An Equal Opportunity Menace,” NBER Working Paper, December 2008.
236-239 What Rationality?: Eugene Fama’s quote is in Douglas Clement, “Interview with Eugene Fama,” The Region, Federal Reserve Bank of Minnesota, December 2007. Keynes’s quote is in John Maynard Keynes, The General Theory of Employment, Interest and Money (New York: Harcourt Brace and World, 1965), p. 161. Robert Shiller’s theory is described in George Akerlof and Robert Shiller, Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism (Princeton: Princeton University Press, 2010).
240-246 Economics for a New World: Limits to the assumption of human rationality and self-regard are discussed in Herbert Gintis, “Five Principles for the Unification of the Behavioral Sciences,” Working Paper, May 13, 2008. The impact of payments on altruistic motivations is discussed in Carl Mellström and Magnus Johannesson, “Crowding Out in Blood Donation: Was Titmuss Right?,” Journal of the European Economic Association, MIT Press, Vol. 6, No. 4, 2008, pp. 845-863; William Upton, “Altruism, Attribution and Intrinsic Motivation in the Recruitment of Blood Donors,” doctoral dissertation, Cornell University, August 1973; and Dan Ariely, Anat Bracha, and Stephan Meier, “Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially,” Federal Reserve Bank of Boston Working Paper, August 2007 (www.bos.frb.org/economic/wp/wp2007/wp0709.pdf,