http://blogs.cfr.org/shlaes/2008/11/18/russ-rides-to-the-rescue/ Just another Blogs.cfr.org weblog Tue, 02 Jun 2009 07:52:31 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://blogs.cfr.org/shlaes/2008/11/18/russ-rides-to-the-rescue/#comment-18 Rien Huizer Wed, 19 Nov 2008 10:27:33 +0000 http://blogs.cfr.org/shlaes/?p=47#comment-18 Negative net domestic investment is negative net domestic investment. Associating that with an investor psychology like you do may appear plausible but there is no proof. I would guess, equally plausibly, that there was a shortage of bank lending capacity, especially for riskier projects and compared to the 1920s. Whether or not regime uncertainty (i feel that it the bogeyman here) played a role is a good question in the early years (say through 1935) but after that policy direction should have been pretty clear. But anyway, it is a very interesting area for enquiry, to be handled with care because the present is not particularly immune to emotional, or even irrational patterns of group behavior. This private investor for instance, is not going to increase his risk, happy to have dodged most of the bullets that killed his mates.. Negative net domestic investment is negative net domestic investment. Associating that with an investor psychology like you do may appear plausible but there is no proof. I would guess, equally plausibly, that there was a shortage of bank lending capacity, especially for riskier projects and compared to the 1920s. Whether or not regime uncertainty (i feel that it the bogeyman here) played a role is a good question in the early years (say through 1935) but after that policy direction should have been pretty clear. But anyway, it is a very interesting area for enquiry, to be handled with care because the present is not particularly immune to emotional, or even irrational patterns of group behavior. This private investor for instance, is not going to increase his risk, happy to have dodged most of the bullets that killed his mates..

]]>