Do not miss this terrific piece by Barry Ritholz — following is just a teaser:
(…) economics is to important to leave to just anyone. Even economists.
Towards that end, and to further illuminate our discussion, I suggest the following questions be used for all economic PhD candidates in their qualifying exams:
• True or False: Humans act to obtain the highest possible well-being for themselves given available information about opportunities and other constraints, both natural and institutional, on their ability to achieve predetermined goals.
-Explain your answer in real world practice, rather than theoretical, terms.• Starting in 2001, the FOMC started a monetary accommodation that took rates to the lowest levels in over 40 years, and then kept them there for 3 years. Discuss the economic and market impact of these rates. Include commodities, residential real estate, and financial derivatives in your answer.
• Almost the entirety of the economics profession missed the 2008 recession, the worst in many decades, in advance. Why?
• Nobel Laureate Joseph Stiglitz wrote: “The Chicago School [of economics] bears the blame for providing a seeming intellectual foundation for the idea that markets are self- adjusting and the best role for government is to do nothing.” Discuss the intellectual errors of The Chicago School, from Milton Friedman forwards.
– For Booth School of Business PhD candidates ONLY: Why is the rest of the world wrong, and your belief system correct?
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