Thursday, March 15, 2012

Governments And Incentives

...Game theory is also helpful in understanding how governments are likely to behave during a debt crisis. The key, Rogoff argues, is to ignore everything that governments say and instead to concentrate on the incentives that drive their behaviour. “One of the reasons that Carmen Reinhart and I hit it off, is that we are both incredibly cynical about governments.”

Rogoff is the co-author of "This Time Is Different: Eight Centuries of Financial Folly"

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