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Financial systems are a continuous attempt to reshuffle assets towards the people who can manage them best or who are most tolerant of whatever their particular risk/reward payoff functions are, and that means constantly examining flows in order to determine their present value, and speculating about how that present value might change, or might be... See more

Stocks and Flows

Impossible trinity

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Modern economics has formulated “The Impossible Trinity” to express the plight of modern central bankers, which states: No government can successfully achieve all three goals of having a fixed foreign exchange rate, free capital flows, and an independent monetary policy.

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In contrast, fiat currencies, which are jurisdictional standards, commonly require adapters that extract rents. Financial intermediaries serve as adapters that coordinate economic activity across political boundaries.

Stephen McKeon • Components of Coordination

Suing a foreign government is usually unrewarding, because the government's overseas assets are generally modest in size, or completely protected from litigation in the case of embassies and other diplomatic facilities. But as Porzecanski noted, in one recent case an aggressive legal strategy had paid off for Elliott Associates, a New York–based &q

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Finance

Jennifer • 1 card

A short-lived capital stock will manifest in accelerated depreciation and a fragile capital structure will incur an undue interest charge.