100 search results for "grossman"

Grossman Co-Authors Article on British Stock Market

Grossman

Richard Grossman

Richard Grossman, professor of economics, recently co-authored an article titled “Before the Cult of Equity: the British Stock Market, 1829-1929” in European Review of Economic History, published on March 24, 2021.

According to the paper’s abstract, the co-authors “analyze the development and performance of the British equity market during the era when it reigned supreme as the largest in the world. By using an extensive monthly dataset of thousands of companies, we identify the major peaks and troughs in the market and find a relationship with the timing of economic cycles. We also show that the equity risk premium was modest and, contrary to previous research, domestic and foreign stocks earned similar returns for much of the period. We also document the early dominance of the transport and finance sectors and the subsequent emergence of many new industries.”

Grossman on Mitigating the Economic Fallout from the Coronavirus

Grossman

Richard Grossman

Richard Grossman, professor and chair of economics, is an expert in economic history as well as current policy issues in macroeconomics, banking, and finance. In this Q&A, we asked him about the economic fallout from the coronavirus pandemic, and how the government is responding in efforts to mitigate the damage.

Q: We’ve all seen the headlines about a coronavirus-induced recession. What is the current state of the economy, and what do you predict we’ll see over the coming months?

A: Prior to the virus outbreak, the American economy was doing well by conventional standards. The unemployment rate was 3.5% in March, down from a peak of 10% around a decade ago. According to the government’s most recent estimate (released on Feb. 27), real gross domestic product grew by 2.3% in 2019. Not stellar, but high relative to other developed economies. It is going to get substantially worse quite soon.

Grossman Discusses Latest Unemployment Trends on WTIC Radio

Grossman

Richard Grossman

On Oct. 16, Richard Grossman, chair and professor of economics, discussed the latest unemployment numbers and current state of the economy with Todd Feinburg at WTIC in Hartford. This month, the national unemployment rate has fallen to a new low—3.5%.

“Historically, and certainly for the last 10 years, the number peaked at 10% after the financial crisis, and it’s been working its way down ever since,” Grossman said. “That doesn’t mean all is wonderful if you’re in the labor force. There’s a lot of other things going on … people working part-time who would like to be working full-time … people who are doing contract work that would like to be having full-time jobs with benefits.”

Economists generally see an uptick in wages when unemployment goes down.

“Last month, the wage rate went up, but it went up by less than it had gone up in the previous month, so it suggests that even though the employment rate is low, that still hasn’t had an effect on wage. Normally we’d expect a really strong labor market to have some positive impact on wages.”

Grossman is an expert on economic history and current policy issues in macroeconomics, banking, and finance.

Grossman Discusses British Stock Market on Economics Blog

Grossman

Richard Grossman

Richard Grossman, professor of economics, authored a blog post on the Vox CEPR website with Gareth Campbell and John Turner (Queen’s University Belfast) titled, “New monthly indices of the British stock market, 1829-1929.”

Although long-run stock market data are an important indicator, obtaining them is challenging. This column constructs new long-run broad-based indices of equities traded on British securities markets for the period 1829-1929 and combines them with a more recent index to examine the timing of British business cycles and compare returns on home and foreign UK investment. One finding is that the capital gains index of blue-chip companies appears to be a good bellwether of macroeconomic behavior.

The post is based on their CEPR and Wesleyan Economics Working Paper, “Before the cult of equity: New monthly indices of the British share market, 1829-1929.”

Grossman in The Conversation: May Jobs Report Suggests a Slowing Economy—and Possibly an Imminent Interest Rate Cut

Richard Grossman

Wesleyan faculty frequently publish articles based on their scholarship in The Conversation US, a nonprofit news organization with the tagline, “Academic rigor, journalistic flair.” In a new article, Professor and Chair of Economics Richard Grossman analyzes the latest jobs report.

May jobs report suggests a slowing economy – and possibly an imminent interest rate cut

The latest jobs data suggests an interest rate cut may be imminent.

The Labor Department reported on June 7 that U.S. nonfarm payroll employment increased by 75,000 in May, while the unemployment rate remained unchanged at 3.6%. This level of job creation was well below economists’ forecasts of about 185,000 new jobs, as well as below the average monthly increase of 164,000 in 2019 and 223,000 in 2018.

Although it’s difficult – even for an economist like me who studies economic policy – to interpret the data reported in any one jobs report as the beginning of a trend, the latest numbers do suggest the Federal Reserve may have to lower its benchmark interest rate to shore up the economy.

That may happen as soon as this month, when the Fed’s interest rate-setting panel, the Federal Open Market Committee, convenes its next meeting June 18-19. A cut would be a sharp reversal from Fed policy as recently as December, when it last raised the rate.

Grossman Comments on the Economic Impact of Brexit

Richard Grossman

Professor of Economics Richard Grossman was asked by Wales Online about his expectations for the economic impact of Brexit over the next few years. He said:

“Leaving the European Union will be a drag on the British economy in the medium term. Even before Brexit takes effect, however, the economy will be hurt by two factors: expectations and uncertainty.

“The expectation that the UK will no longer have free access to the European market may lead exporters to reorient production toward domestic consumption or export to non-EU regions well before Brexit comes into force. UK-based financial firms may shift operations to EU locations in anticipation of Brexit, rather than waiting until it is a fait accompli.

“And firms that rely on high-skilled labour may relocate to other countries if they expect the reduction in immigration that is expected to accompany Brexit to  reduce the pool of talented workers in the UK.

“In addition to its anticipated effects, the economy will suffer from the uncertainty surrounding Brexit. There really is no precedent for a country to leave the EU, so no one really knows how the negotiations will turn out.

“And markets hate uncertainty. The worse the perceived effect of Brexit, the worse a drubbing the pound will take.

“A steady decline might support exports to some extent, but will lead to inflation at home as imported goods become more expensive. What is more likely than a steady decline is a more volatile pound, which will help no one.”

 

Grossman Presents Paper at the Bank of England

Richard Grossman

On June 23, Professor of Economics Richard Grossman presented a paper at an economic history symposium jointly sponsored by the Bank of England and the the Centre for Economic Policy Research. Titled, “Beresford’s Revenge: British equity holdings in Latin America, 1869-1929,” the paper looks at stock market returns of Latin American firms traded on the London Stock Exchange.

The program for the conference can be seen here.

Grossman Argues Truth Was Lost in the Election

Richard Grossman

Richard Grossman

Professor of Economics Richard Grossman tells his students that getting closer to the truth is what economic research is all about. That’s why he was so dismayed when “my devotion to, and belief in, the truth was battered by the presidential election,” he writes in an op-ed on The Hill.

He writes:

It turns out that polling data and analysis contained very little truth. The news were no better. The mainstream media got many things wrong. And there was no shortage of fake news. Although peddled as the real thing, it really wasn’t even trying to provide truth, only to shape opinion.

But by far the biggest letdown in the truth department was Donald Trump, who proved that telling lie upon lie upon lie need not prevent someone from being elected president.

“What should the truth-loving public do going forward?” Grossman asks.

First, pay attention to sources. It is relatively easy to construct a realistic website that has the look and feel of a real news organization or reputable think tank. Do not be fooled. If someone tells you something about the state of employment in the United States, double check facts at Bureau of Labor Statistics’ website. The U.S. government is the best, most reliable source for factual data about the nation’s economy. Obama didn’t fudge the numbers, and Trump is unlikely to be able to do so.

Second, even relatively trusted new sources have their less trustworthy bits. In print media, the division between truth and opinion is usually clear. You can generally trust what you read in the Wall Street Journal, until you get to the opinion pages. Television networks are less clear about separating fact from fiction. CNN’s hiring of Trump campaign employee Corey Lewandowski—while he was on the Trump payroll and still subject to a non-disclosure agreement—should have set off alarm bells among CNN viewers, not to mention the better journalistic instincts of CNN’s management.

Third, be demanding. I encourage my students to challenge the authors that they read in class, including me. Ask questions, check sources and verify the truth for yourself. Just because something has been shared on Facebook a million times does not mean it is true. We should challenge the assertions of politicians of all stripes just as vigorously.

Finally, we need to care more about the truth. One of the most troubling aspects of the election was that so many people voted for Trump despite being fully aware of his many lies because “he shouldn’t be taken literally.” At the risk of sounding naive again, approaching national elections with the attitude that outright lies don’t matter does not bode well for the future of our democracy.

Grossman Speaks on the Wealth of 18th Century Middletown Residents

Richard Grossman

Richard Grossman

As part of the “A Vanished Port” series, Richard Grossman, professor of economics, presented a lecture titled, “How Rich Was Rich,” at the Russell Library in Middletown, Conn. on Nov. 9.

The lecture came as part of a newly opened exhibit at the Middlesex County Historical Society. “A Vanished Port: Middletown and the Caribbean, 1750-1824,” takes objects and documents from the time period to illustrate the “culture of prosperity that grew from Middletown’s trade relationships with the slave-worked sugar plantations of the English Caribbean.”

Using Middletown merchant, Richard Alsop, who died in 1776 with a huge estate that included property, possessions, and human beings, all valued at 52,000 pounds as an example, Grossman attempted to answer the question, “Were Alsop and his fellow Middletown businessmen rich by modern standards?” In this vein, Grossman examined the colonial currency of early Connecticut, its buying power, the monetary standards of the time, and the difficulty of understanding a very different form of money in today’s standard. Simply put, he discussed “the complexity of comprehending economies from long-ago in the present day,” according to an Oct. 5 article published in the Hartford Courant.

More information on the exhibit “A Vanished Port” is posted to the historical society’s website.

Grossman to Advise Queen’s University’s Economic Programs

At Queen’s University, in Belfast, Northern Ireland, Richard Grossman, professor of economics, was appointed to the International Advisory Board of Queen’s University Center for Economic History, where he will advise on the university’s many economic programs. Grossman also served as an external examiner on a PhD thesis titled, “Bears and Bubbles in Financial Markets: Essays on the British Bicycle Mania,” at Queen’s University.

Grossman also presented his co-authored papers “Beresford’s Revenge: British equity holdings in Latin America, 1869-1929,” and “Long-Run Patters and Shifts in Wealth—Insights from Irish Share Prices since 1825,” Sept. 1-2 at the 6th Eurhistock Conference, a conference focusing on the history of the European stock market.

Grossman, Imai Study Effects of Prominent Directors on 19th Century British Banks

Richard Grossman, professor of economics, and Masami Imai, professor and chair of economics, professor of East Asian studies, are the authors of an article published January 2016 in Explorations in Economic History. 

The article is titled “Taking the lord’s name in vain: The impact of connected directors on 19th century British banks.” Grossman and Imai considered the appointment of prominent, well-connected individuals (former members of Parliament and lords) to the boards of directors of banks in pre-World War I Britain, and investigated whether their presence enhanced equity value for bank shareholders. Surprisingly, they found that these individuals actually had negative effects on bank equity returns.

The article is available online to read for free until February 2016.

Grossman, Imai Write About Boehner’s Next Move

Richard Grossman, professor of economics, and Masami Imai, professor and chair of economics, professor of East Asian studies, are the authors of an op-ed published in The Guardian about House Speaker John Boehner’s likely next move when he retires from Congress. The op-ed is titled “Whoever hires John Boehner post-Congress will make a terrible investment.”

They anticipate that, like most former members of Congress and high ranking members of the executive branch, Boehner is likely to have his pick of lucrative job offers—to become an investment banker, lobbyist or corporate adviser. “But for any of these companies, John Boehner would be a terrible investment,” they write.

They cite their own research looking at the hiring of politically connected directors from British government in the three decades before World War I, which found that these appointments tended to have a negative effect on bank equity returns.