Is growth in the financial sector good for the economy?
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Is growth in the financial sector good for the economy?
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Re: Is growth in the financial sector good for the economy?
#2Since it's no longer a Free Market, might as well go with a planned economy - now that supercomputers allow for actual real-time planning.
Re: Is growth in the financial sector good for the economy?
#3Since it's no longer a Free Market, might as well go with a planned economy - now that supercomputers allow for actual real-time planning.
There never was a Free Market. I second the idea of revisiting central planning with tools capable of doing proper optimization at scale.
Re: Is growth in the financial sector good for the economy?
#4Problem with financial sector began when US Treasury dropped gold standard as basis for dollar. Since then FED has unrestricted ability to create "money" from the void. This leads to market bubbles, where the real money, earned on real-life activities such as manufacturing being lost in financial-market-style gambling. It is remarkable that so called "crysises" started to happen more often as financial sector grew.
Re: Is growth in the financial sector good for the economy?
#5Since it's no longer a Free Market, might as well go with a planned economy - now that supercomputers allow for actual real-time planning.
There never was a Free Market. I second the idea of revisiting central planning with tools capable of doing proper optimization at scale.
I don't think it ever was a question of tools, but rather who is allowed to use those tools.
Re: Is growth in the financial sector good for the economy?
#6Earlier quoted context omitted.
There never was a Free Market. I second the idea of revisiting central planning with tools capable of doing proper optimization at scale.
I don't think it ever was a question of tools, but rather who is allowed to use those tools.
I think it actually was. Central planning is a Bad Thing because Soviets did it and it went bad, so nowadays its inferiority is treated as an axiom. But back then optimization theory was just starting to develop and was never actually applied in practice, and we didn't have enough computing power, nor instant communication infrastructure. I think we should revisit the concept of central planning with algorithms doing global optimizations based on real-time signals.
Re: Is growth in the financial sector good for the economy?
#7"Our hypothesis is that it arises because finance tends to favour relatively low productivity industries as such industries usually own assets that are relatively easy to pledge as collateral."
My alternative hypothesis would be brain drain from production R&D into finances.
Re: Is growth in the financial sector good for the economy?
#8Since it's no longer a Free Market, might as well go with a planned economy - now that supercomputers allow for actual real-time planning.
There never was a Free Market. I second the idea of revisiting central planning with tools capable of doing proper optimization at scale.
Large corporations typically implement a form of central planning - that's what applications such as Oracle Hyperion and IBM Cognos are for - managing complex multidimensional models that integrate actual historical values with multiple forecast scenarios.
Re: Is growth in the financial sector good for the economy?
#9"Our hypothesis is that it arises because finance tends to favour relatively low productivity industries as such industries usually own assets that are relatively easy to pledge as collateral." My alternative hypothesis would be brain drain from production R&D into finances.
Both hypothesises can be true. Nothing complex is ever caused by one factor.
Re: Is growth in the financial sector good for the economy?
#10Since it's no longer a Free Market, might as well go with a planned economy - now that supercomputers allow for actual real-time planning.
This is actually an interesting hypothesis - has computing advanced enough to make central planning possible. I am not sure how you would test it though.