Masami Imai, professor of economics, participated in the first annual Stanford Summer Juku on the Japanese Political Economy. He discussed a paper titled, “Banks restructuring sonata: How capital injection triggered labor force rejuvenation in Japanese banks” by David Vera. Learn more here.
Tag Archive 'economics'
Professor of Economics Richard Grossman recently had three op-eds published in major newspapers. All related in different ways to the U.S. Congress’ negotiations over the budget and debt ceiling, and the resulting shut down. Grossman is the author of a new book, Wrong: Nine Economic Policy Disasters and What We Can Learn from Them, published this month by Oxford University Press. Read more about it in this Wesleyan Connection story.
The Hartford Courant on Oct. 4 published an op-ed by Grossman arguing that the Republicans were on an “ideological crusade” in their refusal to pass a continuing budget resolution unless substantial changes were made to the Affordable Care Act. Pointing to examples as diverse as the 19th century Irish famine and Japan’s refusal to confront its ailing banks in the 1990s, Grossman writes: “Republicans should take a lesson from history, which has shown time and time again that such ideological crusades, when applied to economic policy, can have disastrous consequences.”
And on Oct. 19, USA Today published another op-ed calling upon policy makers to regularly conduct “autopsies” of economic policy—particularly when things go wrong, as with the recent government shut-down and near-breach of the debt ceiling. “Although the current shut-down is a pitiful attempt by the Republicans to reverse what is settled law and policy (Obamacare), it is not clear that the Democrats have advanced any sound agenda for solving our national budget issues during the last two years either,” Grossman writes. “It is time to call in a pathologist. Even though digging through the viscera of the political stalemate in Washington would no doubt turn our collective national stomach, it’s an autopsy that is well worth conducting.”
And on Oct. 20, The Boston Globe published another op-ed by Grossman, in which he writes that October should be labeled “Financial Crisis Month.” Over the past two centuries in the U.S. and Europe, October—and, more generally, the autumn months—have seen a string of serious financial crises. Grossman explains the historical reasons behind this trend, from the timing of the harvest to the bursting of asset bubbles. Today, he writes, politicians returning from their summer vacations and doing “stupid things” is most likely to blame for the continued popularity of financial crises in October.
Richard Grossman, professor of economics, is the author of Wrong: Nine Economics Policy Disasters and What We Can Learn from Them, published by Oxford University Press in October 2013.
In recent years, the world has been rocked by major economic crises, most notably the devastating collapse of Lehman Brothers, the largest bankruptcy in American history, which triggered the breathtakingly destructive sub-prime disaster. What sparks these vast economic calamities? Why do our economic policy makers fail to protect us from such upheavals?
In Wrong, Grossman addresses such questions, shining a light on the poor thinking behind nine of the worst economic policy mistakes of the past 200 years, missteps whose outcomes ranged from appalling to tragic. Grossman tells the story behind each misconceived economic move, explaining why the policy was adopted, how it was implemented, and its short- and long-term consequences. In each case, he shows that the main culprits were policy makers who were guided by ideology rather than economics.
Masami Imai, professor of economics, professor of East Asian studies, is the author of a newly-published paper and a paper that just won an award. ”Local Economic Effects of a Government-Owned Depository Institution: Evidence from a Natural Experiment in Japan,” was given the best paper award in the Journal of Financial Intermediation. The paper, originally published in that journal in January 2012, can be read here.
Imai is also the co-author–with Peter Hull of the Massachusetts Institute of Technology–of a paper,”Economic Shocks and Civil Conflict: Evidence from Foreign Interest Rate Movements,” published in the Journal of Development Economics in July. It can be read online here.
Professor of Economics Richard Grossman’s op-ed, “The Best Way to Reform Libor: Scrap It,” was published in The Wall Street Journal on July 25. “The British have learned nothing from the recent Libor scandal” involving the manipulation by banks of a vitally important interest-rate benchmark, writes Grossman. This is clear from a recent decision by a British government-appointed committee to hand over control of Libor to NYSE Euronext, a company that owns the New York Stock Exchange, the London International Financial Futures and Options Exchange, and a number of other stock, bond, and derivatives exchanges. “In other words, the company that will be responsible for making sure that Libor is set responsibly and fairly will be in a position to profit like no one else from even the slightest movements in Libor.”
The only solution, writes Grossman, is to scrap Libor and devise alternative market-determined benchmark rates, which cannot be manipulated. He concludes, “The incentive to game an benchmark rate such as Libor is just too high to risk putting it in the hands of a single private entity, however committed that entity may be to restoring its credibility. Replacing Libor with a transparent, fair, market-based alternative is the only sensible solution.”
The op-ed can be read on The Wall Street Journal website by those in the Wesleyan network, and WSJ subscribers.
Professor of Economics Richard Grossman presented a paper during the Workshop on Monetary and Financial History, held June 26 at the at the Federal Reserve Bank of Atlanta. The paper he presented, titled, “Bloody Foreigners! Overseas Equity on the London Stock Exchange, 1870-1913,” considers data on capital gains, dividend, and total returns for domestic and overseas equities listed on the London Stock Exchange during 1870-1913. The paper is available to read here.
Professor of Economics Richard Grossman has been named a 2013 Guggenheim Fellow. He will work on a project about the evolution of banking regulation across the industrialized world.
Awarded by the John Simon Guggenheim Memorial Foundation, the fellowship assists research and artistic creation “for men and women who have already demonstrated exceptional capacity for productive scholarship or exceptional creative ability in the arts.” This year, 175 scholars, artists and scientists were selected to receive fellowships from a group of almost 3,000 applicants from the U.S. and Canada.
“The Guggenheim Foundation has been giving awards to distinguished scholars and artists for nearly 90 years, including Nobel laureates, Pulitzer Prize winners, a winners of a host of other important awards. It is an honor to be in such company,” said Grossman. “It is particularly meaningful to be the only member of the 2013 class of Guggenheim Fellows who is an economist.”
Describing his project, Grossman said, “I will be looking in particular at how historical evolution affects current day banking regulation—what those in the business call, ‘path dependence.’ So, for example, if California had particularly liberal banking laws (eg. Easy entry into banking, a minimum of restrictions on how banks can conduct business) in the 19th century, and if Connecticut had particularly stringent laws (eg. High barriers to entry, many restrictions on banking operations), how likely is it that the relative stringency of their laws will remain today?”
He added, “I am excited about this research. When banks work well, they contribute to economic prosperity; when they don’t, things can go very wrong. This research will help identify which regulatory regimes have been conducive to economic growth and stability and which have not. I hope that the results will provide guidance to policy makers in the U.S., Europe, and Japan who are currently crafting new regulations.” (more…)
Rosa Hayes ’13 presented her paper on yield spread during The Carroll Round, an annual international economics conference at Georgetown University, in April. The Carroll Round provides a unique forum for research and discussion among the world’s top undergraduates.
The goal of the Carroll Round is to foster the exchange of ideas among the leading undergraduate international economics and political economy students by encouraging and supporting the pursuit of scholarly innovation in the field.
Hayes’ advisor is Masami Imai, chair and associate professor of East Asian studies, associate professor of economics and director of the Freeman Center for East Asian Studies. She also has been serving as the head tutor of Quantitative Analysis Center’s tutoring program under Manolis Kaparakis, director of the centers for advanced computing.
Professor of Economics Richard Grossman was an invited discussant at a conference on “Understanding the Capital Structures of Non-Financial and Financial Corporations,” sponsored by the National Bureau of Economic Research. The conference took place in Cambridge, Mass. on April 5-6.
Grossman discussed a paper titled “Short-Term Debt and Financial Crises: What can we Learn from Treasury Supply,” by Arvind Krishnamurthy and Annette Vissing-Jorgensen, both of Northwestern University. For more information see the conference’s website.
“Climate Change, once considered an issue for a distant future, has moved firmly into the present.” This is the message in the draft version of the Third National Climate Assessment, which was released on Jan. 11.
Gary Yohe, the Huffington Foundation Professor of Economics and Environmental Studies, is vice chair of the National Climate Assessment and Development Advisory Committee (NCADAC), a 60-member committee that includes representatives from academia, state and local governments, non-governmental organizations, business and industry, and others, and the committee that issued this draft.
Since this is a “review draft,” Yohe encouraged the Wesleyan community and their friends (along with their enemies) to read the draft report, or any sections of the 1,000 page long document that are of interest. The draft is available online, and anyone can submit review comments at review.globalchange.gov by April 12.
Yohe said the committee is seeking comments from individuals, non-governmental organizations, and those working in government at all levels. He said author teams would respond publically, if not personally, to every comment received. The final draft of the National Climate Assessment is due to be released in 2014; the revision process will occupy most of the summer and fall of next year.
“It is a complicated process,” Yohe said. The draft report is written by 240 different authors, and was based on the best available climate science as of the end of the summer of 2012, gathered from experts around the country in the public and private sectors, from stakeholders in all sectors of the economy, and from federal agencies.
The draft concludes “that the evidence for a changing climate has strengthened considerably since the last National Climate Assessment report, written in 2009.”
According to the draft report, the average temperature in the U.S. has risen by about 1.5 degrees Fahrenheit since 1895, with more than 80 percent of this warming occurring since 1980. Moreover, this past decade was the hottest on record in the U.S., and 2012 was the warmest year on record by about one degree Fahrenheit. This warming trend is expected to continue, with average temperatures projected to rise between 2 and 4 degrees Fahrenheit in most areas over the next few decades.
An introductory Letter to the American People, signed by Yohe as a co-chair and his colleagues on the committee, states that, “Americans are noticing changes all around them. Summers are longer and hotter, and periods of extreme heat last longer than any living American has ever experienced. Winters are generally shorter and warmer. Rains come in heavier downpours, though in many regions there are longer dry spells in between.” These climatic changes have resulted in more frequent flooding in coastal cities and inland cities near large rivers; more wildfires that last longer, threaten more homes, and burn more acreage; and erosion of sea ice in Alaska, threatening to make relocation a necessity for some communities.
“The draft shows how observed climatic changes are already having wide-ranging impacts in every region of our country and most sectors of our economy. Some of these changes can be beneficial over the near term, but most have already proven to be detrimental,” Yohe remarked.