金融学专业英语.docx

1、金融学专业英语The great trailblazerEconomists everywhere should mourn the passing of Gary Becker.IF THERE is one person to blame for economists habit of opining on everything, it is Gary Becker, who died on May 3rd. Not content with studying the worlds economies, he was the first prominent economist to app

2、ly economic tools to all aspects of life. His revelation was the sort that seems obvious only in hindsight: that people are often purposeful and rational in their decisions, whether they are changing jobs, taking drugs or divorcing their spouses. This insight, and the work that followed from it, ear

3、ned him a Nobel prize in 1992. No less an eminence than Milton Friedman declared in 2001 that Mr Becker was “the greatest social scientist who has lived and worked in the last half-century”.At the heart of Mr Beckers work was the view that “individuals maximise welfare as they conceive it.” Welfare

4、need not mean income; it could derive from the pleasure of altruism or the thrill of deviancy. But critically, this thesis implied that people respond to incentivesa realisation that opened the door to insights across the whole range of human activity.Mr Becker first used this approach in his doctor

5、al study of discrimination, a raw issue in 1950s America. At the time economists models assumed that employers cared only about productivity, whatever the colour of the worker. Shunting this view aside, Mr Becker instead assumed that many individuals had a “taste for discrimination”, and perceived t

6、hemselves to be worse off when forced to work alongside people of other races. He then explored how this preference affected labour markets.In America, where the black population was roughly one-tenth of the total, discrimination against blacks led to relatively small reductions in white incomes but

7、 far more substantial ones for black workers. In South Africa, with a far higher proportion of blacks, discrimination brought much larger reductions in incomes across the economy. Mr Becker pointed out that although competition from more rational firms might gradually eliminate corporate discriminat

8、ion, market forces alone would rarely erode discrimination rooted in the tastes of workers or consumers. His book on the subject, “The Economics of Discrimination”, became the foundation for subsequent research.Mr Beckers restless mind then focused on crime. He became intrigued after weighing the od

9、ds and cost of getting a parking ticket, and deciding to risk it. He looked sceptically on the view, common at the time, that crime was simply deviant behavioura form of mental illness. At least some of it, he reckoned, sprang from a rational consideration of perceived costs and benefits. Moral norm

10、s might inhibit some individuals from breaking the law, but others would overcome their qualms when the return to criminal activity was high, or the likely punishment mild. Such calculations would apply, he argued, across a wide variety of crimes, from parking scofflaws to corporate fraudsters.Mr Be

11、cker puzzled over why crime was economically costly (something that might seem obvious). Part of the answer, he realised, was that it represents rent-seeking: fighting over the spoils of productive activity rather than creation of new wealth. Resources invested in commission of crimes (or in deterri

12、ng them) might otherwise have gone towards growth-boosting activity. His work contributed to new crime-fighting methods. He reckoned there is an optimal amount of crime in society, since it makes little sense to pay huge sums to wipe out illegal activity carrying low social costs. Where enforcement

13、is patchy（not continuous）, governments might still deter misbehaviour by increasing the severity of the punishmentby raising fines, say.Mr Becker was again a pioneer, alongside his Columbia University colleague Jacob Mincer, in developing the concept of “human capital”, the investments individuals m

14、ake in their own education. Mr Becker ventured that spending on education and training should be thought of as an economic choice, made in anticipation of perceived future gains, rather than a high-minded search for cultural enrichment. His view gave insight into labour-market oddities. By taking in

15、to account the difference between general knowledge (of maths, say) and “firm-specific” skills (such as knowledge of in-house software), Mr Becker could explain why skilled workers are less likely to change firms, or why firms are more likely to promote from within. Human capital also shed light on

16、gaps in pay across demographic groupsbetween men and women, for example. That, in turn, shaped Mr Beckers groundbreaking study on the economics of the family.Family valuesMr Becker brought his characteristic analysis to the question, assuming that people are guided in family choices by a desire to i

17、mprove their own welfare. That included marriage and divorce: his analysis implied, for instance, that those in wealthy families would divorce at lower rates, a prediction borne out by data. His work also helped explain falling fertility in rich countries. As wages rise (especially for women), the o

18、pportunity cost of raising children increases, and large families become less attractive. What is more, as the link between education and economic success grows stronger, parents invest ever more in their children (not least, as Mr Becker noted, since such investment can be a form of saving for ones

19、 care in old age).Mr Beckers trailblazing earned plenty of criticism. The interdisciplinary adventurism it embodied peeved(annoy) other social scientists, who doubted that cool-headed analysis played much part in matters of love or larceny(theft). But his work yielded unexpected insights and forced

20、social scientists to rethink their assumptions and sharpen their analyses, the better to learn why people behave as they do and how policy can best help. Whole branches of microeconomics owe their existence to him. It is hard to imagine a more welfare-improving contribution.Debt, morality and the cy

21、cleAT THE heart of the battle between Greece and its EU partners over its debt crisis are conceptions about morality over debt and economics; issues that have been debated for thousands of years. The idea of interest payments on debt was around at the time of Hammurabi, ruler of Babylon in around 18

22、00 BC; his code set maximum rates of 33.3% for loans of grain and 20% for those of silver. There was a lot of focus on what was fair; those who lent cattle to their neighbour were entitled to some or all of the calves that might be born. The Sumerian word for interest, mas, means calves. Aristotle a

23、rgued that an inert commodity like silver, which did not bear fruit, should not carry interest.The concept of usury (an excessive interest rate) was developed by the Catholic Church, although the parable of the talents implies that money should be set to work. See Matthew 25:27Well then, you should

24、have put my money on deposit with the bankers, so that when I returned I would have received it back with interestLater on, there was the concept of productive and unproductive loans: lend your neighbour the money to pay for hospital treatment, and no interest should be expected; lend him the money

25、to start a business, and interest should be handed over.By and large, the creditor was seen as the potentially immoral party in the transaction; there was sympathy for the debtor who could not repay debt owed to the grasping lender. But here is the rub. Creditors risked not getting their money back

26、and so needed to charge high rates to compensate, but restrictions on rates did not allow this to happen.Unsurprisingly, Homer and Sylla, in their epic history of interest rates, find virtually no data on credit and rates from the end of the Roman Empire to the 12th century.A step change in moral at

27、titudes really came about with the rise of the merchant states of the Netherlands and Britain in the late 17th and early 18th centuries. The rulers of these states financed themselves with loans from the wealthy of the land (the Bank of England dates from this period). Parliaments in those states ha

28、d a strong interest in having the monarch pay money back. As the states demonstrated their creditworthiness, their cost of borrowing fell. To these creditors, many of whom were motivated by an austere Protestantism that emphasised the work ethic, failure to repay debt showed a lack of moral fibre. T

29、he idea of the debtors prison is brought down to us by Dickens (who had childhood experience of the phenomenon); but even with his innate sympathy for their plight, he made both Mr Dorrit and Mr Micawber rather ridiculous figures.The moral tide turned after 1945, perhaps because debt has become so w

30、idespread; if debtors are sinners, then we are all guilty. For those who experienced the 1930s depression, debt was the road to ruin. For those born after 1945, debt was both easy to access and the only way to deal with life; it helped that inflation eroded the real burden of repayment.Tied up with

31、this history is the role of the state as both debtor and controller of the money supply. Medieval monarchs needed to borrow money to finance their wars; when the time came to repay, they could simply refuse to do so, or repay in deflated currency. As already stated, British and Dutch merchants had m

32、uch better experiences with their own governments after 1700. But lending to other peoples governments has always been a trickier matter. Even if the government is an ally, things can change rapidly, as French investors who bought Tsarist bonds before 1917 subsequently discovered. How can you enforc

33、e a contract with a sovereign nation? The British resorted to sending in gunboats on a few occasions and Woodrow Wilsons actions in Haiti and the Dominican Republic can be seen in a similar light. The saga of first world war reparations gave the debate a new twist; Keynes, in his famous Economic Consequences of the Peace, argued