Tyler Cowen offers his non-Keynesian take on the recession, applying the theory he lays out in Risk and Business Cycles (recommended for all economics graduate students, but master Snowdon and Vane first). I agree with his arguments, but I want to add what I think is a missing ingredient in his theory: fat tails. David [...]

Tags: Cauchy distribution, Cowen, fat tails, Levy, macro, Modern Macroeconomics, Risk and Business Cycles, Snowdon, Vane
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