Bernanke on The Economics of Happiness

Ben Bernanke’s speech this weekend focuses on this highly-popular area of research: you can read it here.

5 replies on “Bernanke on The Economics of Happiness”

Nothing new.

Perhaps it might have been more relevant to address the loss of happiness by blowing bubbles? He has however, made it more likely that emerging countries may be able to hold more of their capital locally, to the benefit of their populations. Why invest in currencies that are destined to be devalued and make a low return?

Pat I think you are asking a good question. He doesn’t answer just more BB BS.

Bernanke’s piece is wise, intelligent, and erudite. Should be required reading for all grown-up students of economics.

Perhaps the EU got hold of his speech over the weekend – rescuing PIIGs in distress! Or was it just for their own self-interest!

Just clarify, I was referring to the anecdote below (maybe BB had been tipped off!).

I am reminded of a story about Abraham Lincoln. According to the story, Lincoln was riding with a friend in a carriage on a rainy evening. As they rode, Lincoln told the friend that he believed in what economists would call the utility-maximizing theory of behavior, that people always act so as to maximize their own happiness, and for no other reason. Just then, the carriage crossed a bridge, and Lincoln saw a pig stuck in the muddy riverbank. Telling the carriage driver to stop, Lincoln struggled through the rain and mud, picked up the pig, and carried it to safety. When the muddy Lincoln returned to the carriage, his friend naturally pointed out that he had just disproved his own hypothesis by putting himself to great trouble and discomfort to save a pig. “Not at all,” said Lincoln. “What I did is perfectly consistent with my theory. If I hadn’t saved that pig, I would have felt terrible.”

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