The Awesome Science of Chinonomics

The more you want to get away from it, the easiest it finds you. Bad news and ominous signals have an inexorable way of powering their way to your skull. Regardless of how badly you want to get away from them. Our loss aversion makes us more attentive to bad news, because not acting on negative risk meant literally dying when we were apes.  Wanna know the saddest part of all this? This is still very much true in the year 2022.  I remember telling myself once and again when I heard nonstop reports on Russian amassing troops on the border with Ukraine before the invasion:  "Enough already! This whole 'will-he/will-he-not invade' non sense is getting tiresome. Of course Putin won't invade! I'm sick of this media alarmism. I mean, the costs are massive. Ukraine is too big a country. It's not Syria. It borders NATO, for God's sake! All Putin has to do to win is retreat, don't invade, and say 'See? I told you! Biden's a warmonger. I told you all along...

Elections are over. SuperPAC's bidding wars for the oval office have ended, marking the beginning of the new electoral cycle. The sheer cost of this year's election and its result prompts many questions. Will the Republicans have to rethink their stance and diversify their reliance on a shrinking white male voter population? Is the personalization of corporations ' influence on elections a pernicious one? Some people might be tempted to rationalize the astronomical figure by downplaying it. "America spends more on Halloween candy  than on political campaigns." That may be true, but what about the fact that campaign spending has grown 12.4 times faster than overall US population in the last 12 years? People still decided whom to vote for in 2000 with $6/per person spent by political campaigning. This time around they spent $13.34/per person. It is clear that the current election model, coupled with the  mediatization  of  politics, pro...

Being called a chicken is never a good thing. You get called that in the schoolyard and the most likely thing to happen next is to hear humiliating laughs of the other mean kids. A movie character loses a game of “chicken”, and he is most likely losing the girl. That game has even been studied by game and signaling theory.    The whole mess in Europe could be reduced to a game of chicken. Here, there are two cars being driven against each other, challenging each other not to veer to the side. One car is driven by Mario Draghi, the other one by the bond vigilantes (or speculators, as Europe’s politicians like to call them). Signaling is paramount. Mario Draghi resists to monetize, and signals that the ECB will not openly use its balance sheet without restrictions to push sovereign rates down. The reason? The ECB –always mindful of its standing as a hawkish institution known as protector of the value of the Euro - risks denting its reputation of independence, which for...