What I meant was, when I was reading Black's collection of essays, and hit the one on interest rates as an option, I made an intuitive connection between the major project I was grappling with at the time. Namely, I was trying to enter the finance world as an economist with a dissertation in capital theory, and so I was trying to come up with a paper where I linked up standard finance papers explaining interest rates as random walks or whatever, with standard GE econ models explaining interest rates as the marginal product of capital. I thought I could provide more constraints on how interest rates evolved over time, by bringing in "knowledge" from macro econ models.

So anyway Black's approach to interest rates clicked with me and made me think I was on the right track, but then I got a job offer and it's 4 years later and I can't really remember what my brilliant insight was. :(

# posted by Bob Murphy @ 11:12 AM