Skip to main content

Armen Alchian

Armen Alchian passed away two days ago aged 98.  Obituaries are available here and here. Below is a short video clip of Alchian talking about property rights.

Alchian was a brilliant economist who inspired several generations of economists, including Nobel prize winners. His papers are amongst some of the most cited in economics. Alchian should have won the Nobel prize in economics as his insights into property rights, inflation, money, economic organisation, the theory of the firm, and the biological approach to economics were all path-breaking. Alchian did the first event study analysis in corporate finance, but it remained a secret for four decades as it pertained to matters of national security - click here to read more.
 
If you read Alchian's papers, you will see that he had the knack of making the dismal science interesting, and his stress was on economic intuition rather than mathematical elegance. His book, Economic Forces at Work, is a must read for all serious thinkers about the economy.
 
 

Popular posts from this blog

Bitcoin Bubble?

According to Robert Shiller , speaking at Davos, Bitcoin is a perfect example of a bubble - story here . Shiller sees Bitcoin as a backwards step in the evolution of money.   George Selgin , a free banker, takes an opposing view - click here .  Although he doesn't believe that Bitcoin is money, he sees its development as a fascinating turn in the evolution of money. In particular, he lauds the fact that Bitcoin production is constrained and cannot be infinite. There is a short video below where Bitcoin explain how it works.

How Valuable Are Connections?

Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton have written a paper on whether firms connected to Timothy Geithner benefited from these connections. They do so by looking at how stocks of these firms reacted to the announcement that he was a nominee for Treasury Secretary in November 2008. They find that there were large abnormal returns for connected firms. Below is the paper's abstract and the full paper is available here . The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small ne

Boom and Bust: A Global History of Financial Bubbles

Boom and Bust: A Global History of Financial Bubbles, co-authored with my colleague Will Quinn , is forthcoming in August. It is published by Cambridge University Press and is available for pre-order at Amazon , Barnes and Noble , Waterstones and Cambridge University Press .