Thursday, October 13, 2016

Some things I forgot to say in class today

You will note that I teach without notes.  This is an old habit that encourages me to be mindful in what I am saying during the live session.  When I used to teach with notes I would go way too fast for the students.  This helps to regulate the pace.  But my memory isn't what it once was.  So I miss saying things I had planned to say.  Also, sometimes things occur to me only after the session that didn't come to mind during the preparation.

On determinants of risk aversion -

Some diversification happens over time.  You try one venture now.  A few years later you try something else and then again a few years after that.  When you are younger, there are more possible episodes, so a greater chance to diversify these things.  This gives one simple explanation for why younger people maybe tolerate risk more than older people, something we mentioned in class.

Risk attitudes almost surely correlate with personal wealth.  People of modest means typically can't diversify their wealth, which may be tied up entirely in just a few assets (home, car, perhaps one bank account).  Wealthier people can have a more balanced portfolio and thereby make themselves immune from idiosyncratic financial risk.

On economic forecasting - 

Don't say I didn't warn you.

On the class project - 

There are currently two posts on the class site that give instructions about how to proceed.
This one gives information on structure and formatting.
And this one gives information about timing and process.

Also let me say that co-authors argue and that arguing is a good thing.  That doesn't mean being rude or intolerant.  It means offering up your view based on your current understanding of what is going on.  Disagreement in this setting can happen and when it does it is a good thing.  It means there is a tension that needs to be resolved.  Coming to a resolution in a reasoned way is a way to learn.

However, sometimes the learning gets cut short because there are deadlines to be met.  That's how it goes.  Dealing with deadlines is an important life skill.

Finally on Econ in the News - 

I normally would not link to a piece like this because it has a bit of a political angle and I am trying to keep national politics outside our course.  However, in the section that discusses the work of Jason Furman, there is mention of monopsony in the labor market.  As we mentioned that in class while reviewing the Excel homework with transfer pricing, I thought it worth noting here.

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