A condition for any market to work well is that consumers have enough information to make good decisions. This is rarely the case with services such as finance. * Theory, backed up by a lot of practical evidence, suggests that markets are a good way of organising many economic activities. But for markets to work,… Continue Reading
Tag Archives: asymmetric information
Barriers to negotiating mutually beneficial outcomes: the example of Greece
The current stand off in talks to renegotiate the Greek debt bailout shows the difficulty of achieving an outcome that could be good for both sides. * Why lenders sometimes rationally forgive part of a loan There is plenty of excellent commentary on the Greek debt situation, arising from a newly elected Greek government which… Continue Reading
Why is it so hard to finance new infrastructure?
There is a great need for infrastructure investment in both developed and developing countries. The former need both refurbishment of old assets and additional capacity. The latter need lots of new capacity, mainly arising from rapid urbanisation. There is also a large pool of savings in pension funds, companies and sovereign wealth funds that is… Continue Reading