PayPal is now worth more than Netflix, eBay, and Twitter by @eugenekim222 businessinsider.com/paypal-now-wor… @pmarca http://t.co/M3IbfNlTi0—
Evan Kirstel (@evankirstel) July 20, 2015
The share market capitalisation of the top tech companies
23 Jul 2015 Leave a comment
in entrepreneurship, financial economics Tags: Amazon on, Apple, creative destruction, entrepreneurial alertness, Facebook, Google, Microsoft
Creative destruction in hard drives
21 Jul 2015 Leave a comment
in entrepreneurship, technological progress Tags: creative destruction
More and more people are able to travel by air
20 Jul 2015 Leave a comment
More and more people are able to travel by air. buff.ly/1G4fMMT #progress http://t.co/Dgseo3FCJL—
HumanProgress.org (@humanprogress) June 18, 2015
Creative destruction in 1GB hard drives
20 Jul 2015 Leave a comment
in economic history, entrepreneurship, technological progress Tags: creative destruction, entrepreneurial alertness
From 10 Million Dollar to 9 cents!
The price of 1GB Hard Drive since 1950(Source: bit.ly/1E4xzDD) http://t.co/TIAZG8OPof—
Max Roser (@MaxCRoser) June 05, 2015
Mises on the origin of profits
19 Jul 2015 Leave a comment
in applied price theory, applied welfare economics, entrepreneurship, industrial organisation, Ludwig von Mises, survivor principle Tags: creative destruction, entrepreneurial alertness, market process, profit and loss, The meaning of competition
Creative destruction in portable Macintosh computers
19 Jul 2015 Leave a comment
in economic history, entrepreneurship, technological progress Tags: creative destruction, laptops, PCs
The 16 Mhz Mac Portable, Apple's first portable Macintosh computer. 1989. http://t.co/nAudOktDBd—
History Pics (@HistoryPixs) February 23, 2014
1st cellphone
18 Jul 2015 Leave a comment
in economic history, economics of media and culture, entrepreneurship, technological progress Tags: cell phones, creative destruction, entrepreneurial alertness
This is the first cellphone.
It went on sale 30 years ago today for $4,000 http://t.co/6zFIf3cxDV—
History Pics (@HistoryPixs) March 14, 2014
Measurement error in the computer age
18 Jul 2015 1 Comment
in applied welfare economics, econometerics, economic history, entrepreneurship, technological progress Tags: age of the computer, capitalism and freedom, measurement error, Robert Solow
Capitalism and The Great Fact in China
17 Jul 2015 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, development economics, economic history, economics of education, economics of regulation, entrepreneurship, environmental economics, growth disasters, growth miracles, history of economic thought, industrial organisation, Marxist economics, Public Choice Tags: capitalism and freedom, China, fall of communism, Leftover Left, transitional economies
As China grew freer economically, its poverty rate fell. buff.ly/1KohOxS http://t.co/OpaxOzNdNs—
HumanProgress.org (@humanprogress) June 29, 2015
And the rich got richer, who cares
16 Jul 2015 Leave a comment
in applied price theory, applied welfare economics, Austrian economics, comparative institutional analysis, constitutional political economy, development economics, economic history, economics of bureaucracy, economics of education, economics of regulation, economics of religion, energy economics, entrepreneurship, environmental economics, financial economics, growth disasters, growth miracles, income redistribution, industrial organisation, international economics, labour economics, labour supply, liberalism, poverty and inequality, Public Choice, rentseeking, survivor principle, transport economics, urban economics Tags: Deirdre McCloskey, entrepreneurial alertness, The Great Enrichment, The Great Escape, The Great Fact, top 1%
"The rich got richer, true. But…" —@DeirdreMcClosk buff.ly/1Imdv4o http://t.co/M3ERx3JTIn—
HumanProgress.org (@humanprogress) June 28, 2015
The rise and rise of Amazon
16 Jul 2015 Leave a comment
in economic history, economics of media and culture, entrepreneurship, industrial organisation, survivor principle Tags: amazon, creative destruction, e-commerce, entrepreneurial alertness
The rise and rise of Amazon in two charts econ.st/1Od8KdV http://t.co/HTs0zngL0Y—
The Economist (@TheEconomist) July 15, 2015
Was the Chinese share market crash rational asset-price movements without news?
14 Jul 2015 1 Comment
in business cycles, entrepreneurship, financial economics, macroeconomics Tags: competition as a discovery procedure, dot.com bubble, entrepreneurial alertness, event studies, learning by doing, sharemarket bubbles, sharemarket crashes
Large share market crashes such as over the recent months in China and the 1987 Wall Street crash do not necessarily imply an economic slowdown.
As the stock market gets rocked, let's remember this one thing about the crash of 1987 businessinsider.com/lets-remember-… http://t.co/BDgy5h5UN0—
Elena Holodny (@elenaholodny) August 21, 2015
The majority of major share market movements occur without any particular news hitting the market. Studies of the 50 largest share market movements in the US stock market between 1946 and 1987 found that the majority of them could not be explained by news. That includes the 1987 share market crash. In October 1987, shares fell by 20% in one day for no obvious reason.
China's stock market selloff explained in 6 charts bloom.bg/1HStJSe http://t.co/0CpoU21RpY—
Bloomberg Business (@business) July 13, 2015
David Romer explained these booms and busts, including the 1987 share market crash in two ways: investor uncertainty about the quality of other investors’ information; and dispersion of information and small costs to trading:
Asset prices can change because initially the market does an imperfect job of revealing the relevant information possessed by different investors and because developments within the market can then somehow cause more of that information to be revealed…
The possibility of imperfect aggregation implies an alternative to external news and irrationality as a potential source of asset-price movements: some price changes may be caused by “internal” news.
That is, asset prices can change because initially the market does an imperfect job of revealing the relevant information possessed by different investors and because developments within the market can then somehow cause more of that information to be revealed.
Either of these models are perfectly plausible. Investors learn from each other through trading and improve their estimations of the value of various shares.
#China Reality Check: #Stocks Are Still Too Expensive for @MarkMobius bloom.bg/1Monzct via @business @frostyhk http://t.co/e3Lv3KwgTZ—
Fion Li (@fion_li) July 13, 2015
As such, through internal learning and discovery within the share market there can be booms and crashes despite no new information, no communication, and no coordination among the participants in trading. Underneath the surface, there is a gradual updating of information by the participants and at a certain point in time, this causes a sudden change of behaviour.
Dow and Gorton made similar points to David Romer about how share market learning is a process of learning, judgement and error correction rather than an instant adjustment:
Strategic interaction and the complexity of the information result in a protracted price response.
Indeed, equilibrium price paths of the model may display reversals in which the two traders rationally revise their beliefs, first in one direction, and then in the opposite direction, even though no new information has entered the system.
A piece of information which is initially thought to be bad news may be revealed, through trading, to be good news.
Bubbles and crashes are consistent with private information held by a few slowly dispersing among market participants until this knowledge was reflected in stock prices as in Hayek’s (1945) analysis of the price mechanism as a means of communicating information.
HT: The one thing you should remember about the stock market crash of 1987 | Business Insider.
Utopia, you are standing in it! 
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