John Maynard Keynes (1883-1946) was a famous British economist, mainly known for his book "The General Theory of Employment, Interest and Money", published in 1936, and for being the father of Keynesian Economics. In particular, Keynes was a strong advocate of full employment and government intervention in order to stop economic recessions: in his opinion, absolutely … Continue reading John Maynard Keynes
The intrinsic value of a share is the actual and correct value of a stock, based on the fundamentals of its issuing company. Besides the fundamentals of the firm, which are the numerical values written in its financial statements, the intrinsic value includes in its calculation also other aspects of the business, both tangible (for example, … Continue reading What is the intrinsic value of a share?
A share (or stock) is a security that gives the buyer part of the ownership of the issuing company. Moreover, a the owner of a share can also have the right to claim a part of the earning gained by the enterprise, which might be distributed among shareholders as dividends. There are two types of shares: common and preferred. The first ones usually allow … Continue reading What is a share?
A financial bubble is an economic period in which the prices of particular types of assets increase in an exaggerated way, strongly exceeding their intrinsic value, only to contract later, when the bubble burst. It is usually originated by an exuberant bullish market and it ends when no more investors or speculators are willing to … Continue reading What is a financial bubble?
On September 15th, 2008 the Great Recession, officialy started in December 2007, materialized in the financial world with the bankruptcy of Lehman Brothers Holdings Inc., one of the oldest and largest investment banks in Wall Street. The fate of the famous financial firm has shown to all the world the fragility and the weakness of the current economic system, centered … Continue reading Are banks necessary?
We all hear talking about inflation, but how does it really work? It is define as the rate of change of prices, and the change can be more or less fast (if it is really high we are talking about hyperinflation); positive or negative (deflation). If we have a little amount of inflation it doesn't … Continue reading 101 Inflation
Human capital refers to the stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value. "Schooling, a computer training course, expenditures on medical care, and lectures on the virtues of punctuality and honesty are capital too in the sense that they improve … Continue reading Gary S. Becker: Human Capital