When Bubbles and Busts and Inefficiencies Are Possible: Some Behavioral Insights into the Strange World of Economic Reality
In this part . . .
B ehavioral economics has a lot to say about the macro-economy, from unemployment, business cycles, and asset prices, to economic growth and the determinants of happiness. In this part, I discuss behavioral finance and, related to this, inefficient markets and asset bubbles and busts.
I also explain some of the insights provided by behavioral economics to understanding the business cycles.
Finally, I discuss some of the key sources of happiness. Of crucial importance is how happiness is affected by nonmaterial variables in addition to income and wealth. Money can’t buy happiness, at least not all the time.