Entrepreneurs, risk managers, and uncertainty
Hyman Minsky offered profound thoughts about the economic dialectic between, as he characterized it, ‘entrepreneurs and bankers.’

Thomas Stanton’s 2012 study of comparative organizational performance during the great 21st-century financial crisis, Why Some Firms Thrive While Others Fail, cites Frank Knight’s 1921 classic, Risk, Uncertainty, and Profit. I consider Stanton’s theme to be how to address the unavoidable reality stated thus by Knight: “Uncertainty is one of the fundamental facts of life. It is … ineradicable from business decisions.”1

As Stanton says, "Knight long ago distinguished risk, which can be quantified, from uncertainty, which requires judgment. Successful firms used judgment to add more protection than quantitative modeling would have suggested."2

Edmund Phelps reflects on Knight’s dictum as follows:

Knight … took the unprecedented position … that most business decisions, especially strategic ones, are to varying degree steps into the unknown. Each of the possible outcomes of a business venture can be considered to have some probability of occurring, but those probabilities are not known.

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State income taxes and the Supreme Court: Maryland Comptroller v. Wynne

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Tuesday, October 28, 2014 | 9:30 a.m. – 12:15 p.m.
For richer, for poorer: How family structures economic success in America

Join Lerman, Wilcox, and a group of distinguished scholars and commentators for the release of Lerman and Wilcox’s report, which examines the relationships among and policy implications of marriage, family structure, and economic success in America.

Tuesday, October 28, 2014 | 5:30 p.m. – 7:00 p.m.
The 7 deadly virtues: 18 conservative writers on why the virtuous life is funny as hell

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A nuclear deal with Iran? Weighing the possibilities

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The forgotten depression — 1921: The crash that cured itself

Please join Author James Grant and AEI senior economists for a discussion about Grant's book, "The Forgotten Depression: 1921: The Crash That Cured Itself" (Simon & Schuster, 2014).

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