*Queen of Versailles*

I enjoyed this movie, although I didn’t think it lived up to its most enthusiastic reviews.  It is striking how much economics the film contains.  The implicit macro model of the crash emphasizes the credit channel, rather than the monetary channel.  Repeated cuts to nominal wages fail to work because credit/liquidity is a complementary factor of production.  There is another implicit model of lender asymmetry, namely that your old lenders may try to drive you under, to get the collateral, and competition from new, less informed lenders cannot step in to fill the gap.  The fixed costs of bankruptcy are high.  The male protagonist in the movie is a Caplanian pro-natalist, and a satire of such at the same time.  Habits are formed, and then unformed, and possibly will be formed again.  The wealthy are not so different from the rest of us.  Someone didn’t read Aristotle, or for that matter Markowitz and Tobin.


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