Tag Archive for economics

Yohe Reappointed to NYC Climate Change Panel

Gary Yohe has been reappointed to the New York City Panel on Climate Change.

Gary Yohe has been reappointed to the New York City Panel on Climate Change.

Gary Yohe, the Huffington Foundation Professor of Economics and Environmental Studies, was reappointed by Mayor Bill DeBlasio to the third New York City Panel on Climate Change on June 30.

Yohe and 18 other experts are tasked with ensuring that the best available climate science continues to inform the city’s resiliency planning. The panel will build on reports by previous panels, and will “look at climate risks through the lens of inequality at a neighborhood scale, as well as focus on ways to enhance coordination of mitigation and resiliency across the entire New York metropolitan region,” according to a press release from the Mayor’s Office.

The panel is an independent body that advises the city on climate risks and resiliency using the best available data. The panel’s report, to be released in 2016, will look at topics including regional climate projections focused on extreme events; community-based assessment of adaptation and equity; critical infrastructure systems, with a focus on interdependent transportation and energy systems in the greater New York City region; expanded climate resiliency indicators and monitoring system; and enhanced mapping protocols. The panel’s second report, released in Feb. 2015, can be read here.

Yohe also is professor of economics, professor of environmental studies.

Grossman Presents Papers in Switzerland, Norway

The economic crisis that led to the recent recession is only one of the reasons Grossman decided to write Unsettled Account. (Photos by Olivia Drake)

Richard Grossman

Richard Grossman, professor of economics, recently presented a talk titled, “An historical perspective on regulatory competition versus cooperation: the view from economics” at the third annual Conference of the University Research Priority Program. The conference, held June 1-2 at the University of Zurich Institute of Law, was titled, “International Aspects of Financial Regulation: Competition vs. Coordination.”

Grossman’s talk focused on cross-border cooperation between international bank regulators in the wake of the U.S. subprime and European debt crises—an effort to enhance banking stability. Examples include the Basel capital accords and European Stability Mechanism. Grossman put these into historical context by looking at episodes of cooperation—and competition—between federal and state regulators in the U.S. during the 19th and early 20th centuries. He presented evidence on several episodes in which state and federal regulators loosened regulations to help banks under their supervision gain a competitive advantage over banks in neighboring jurisdictions. Although cooperation is feasible in some areas of regulation, Grossman argued that regulators will always be inclined to compete—that is, favor their own banks at the expense of others.

On June 20, Grossman presented a paper at the Third CERP Economic History Symposium, held at Norges Bank, Norway’s central bank, in Oslo.

The paper, co-authored by Grossman and Masami Imai, professor of economics, professor of East Asian studies, is titled “Taking the Lord’s Name in Vain: The Impact of Connected Directors on 19th Century British Banks.

The paper utilizes data on the presence of prominent individuals—that is, those with political (e.g., Members of Parliament) and aristocratic titles (e.g., lords) — on the boards of directors of English and Welsh banks from 1879-1909 to investigate whether the appointment of well-connected directors enhanced equity value for bank shareholders.

Their analysis of panel data shows that the appointment of connected directors did not increase equity returns (as measured by the capital gain plus dividend yield on bank shares), but rather that the appointment of MPs to directorships had negative effects on bank equity returns.

Yohe: Pope’s Encyclical on Climate Change ‘Quite Likely a Game-Changer’

Gary Yohe, the Huffington Foundation Professor of Economics and Environmental Studies, wrote in The Hartford Courant about Pope Francis’ encyclical on climate change–“a very valuable and much needed injection of morality into the scientific and economic discussions on climate change — it is quite likely a game-changer.”

While scientists, economists and other professionals have long made a case for taking action to reduce emissions and mitigate the effects of climate change, Yohe writes, “The pope’s encyclical adds a moral dimension to this case with nearly 200 pages of inspiring text about man’s pollution and the immorality of emissions. He notes that the Bible tells humans, as early as the first chapter of Genesis, that they have a stewardship obligation to the planet. The Bible also commands us to protect the least among us — the poorest who lack the means to provide for themselves. These are the people, the world over, who will be most heavily impacted by climate change — the poor, the very young, the elderly and infirm — especially if they live near a coastline. Working from there, as the leader of a billion Catholics, the pope provides theological justification that we are behaving immorally by continuing to avoid reducing emissions.”

Yohe concludes:

I must admit, at this point, that declaring something a sin is way above my pay grade. What I can say from my scientific and faith perspective is this: Putting human beings, their societies and communities, and aspects of nature unnecessarily at risk by ignoring science on the basis of ideology, business interest, or ill-informed and unyielding denial is morally irresponsible — especially for elected officials.

I believe that the pope’s encyclical confirms this perspective not only for more than 1 billion Catholics around the world and across this country, but also for the billions of others from multiple faiths who take seriously their stewardship obligations to the planet and its inhabitants.

Yohe is also professor and chair of economics, professor of environmental studies.

Grossman Speaks to MarketWatch on Reforms to the Fed

Richard Grossman

Richard Grossman

MarketWatch columnist Howard Gold turned to Professor of Economics Richard Grossman for his take on reforming the Fed. Gold took issue with calls from presidential candidate Sen. Rand Paul and others to “audit the Fed,” but instead advocated for term limits for Fed chair-persons and changes in the pivotal Federal Reserve Bank of New York.

On the matter of term limits for the Fed chair, Grossman spoke of former chairman Alan Greenspan, who stuck around nearly 19 years.

Grossman Presents Keynote at Austrian National Bank Conference

Richard Grossman

Richard Grossman

Professor of Economics Richard Grossman recently presented the keynote address at a conference held at the Austrian National Bank.

The presentation, made on March 11, was titled, “Interest rate cycles and implications for the financial sector: a long-term view.” A summary is available here.

The conference was jointly sponsored by Austria’s central bank (the Oesterreichische Nationalbank), SUERF (the European Money and Finance Forum), and BWG (the Austrian Society for Bank Research).

Grossman Talks about Quantitative Easing Policy on Share Radio

Richard Grossman

Richard Grossman

Richard Grossman, professor of economics, is featured in a radio interview with Share Radio in London Feb. 19.

In the interview, Grossman talks about the consequences of the European Central Bank’s new quantitative easing (QE) policy, which may stimulate an economy when a standard monetary policy has become ineffective.

The ECB’s action follows in the footsteps of the central banks of Japan, the United Kingdom, and the United States, which also have used quantitative easing in the 2000s.

A concern that has been raised about the introduction of QE is that persistent low interest rates will lead to another boom-bust macroeconomic cycle similar to the one that ended  in the US subprime crisis. Grossman, who conducts research on historical episodes of financial crises, argues that the European economy is so weak at the moment that the risk of QE causing a crisis is low, and certainly outweighed by the benefits.

Grossman said implementation of the QE may not be noticed right away.

“Over time, this will put a consistent downward pressure on the euro,” which Grossman argues will help European exporters.

Listen to the program here.

Craighead Co-Authors Paper on Account Reversals in Developing and Industrialized Countries

Bill Craighead, assistant professor of economics, is the co-author of “Current Account Reversals and Structural Change in Developing and Industrialized Countries,” published in the February issue of The Journal of International Trade and Economic Development.

The paper compares the experience of high-income and developing countries in adjusting current account deficits, which measure how much they are relying on external borrowing. In both types of country, construction is the most sensitive sector to the current account. On average, adjustments in developing countries are more severe, but that is mainly due to the effects of currency crises. When you take those out, they look more similar. Employment effects in developing countries are less relative to the changes in output, which may reflect differing labor market institutions.

Craighead credits Lisa Lee ’13 for providing her “outstanding research assistance” while writing the paper. Lee worked on the research in 2011 while participating in the Quantitative Analysis Center’s summer program.

Alumni Return to Wesleyan to Share Their Experiences in Finance

On Feb. 6, recent Wesleyan graduates returned to campus and shared their experiences in finance. The conference, titled “Finance — Theory and Applications: A Conversation with Alumni,” covered mergers and acquisitions, value investing, trading and case study analysis. Attendees also had an opportunity to ask questions.

Anand Gopalan ’09, James Hounsell ’11 and Eugene Wong ’09, all of whom have relevant experience in the field of finance, spoke at the event. Joyce Jacobsen, professor of economics, also gave remarks at the conference. The event was hosted by Abigail Hornstein, associate professor of economics, with support from the Allbritton Center for the Study of Public Life and the Wesleyan Investment Group.

“What I enjoyed most was the opportunity to hear how interested the financial industry is in hiring liberal arts-educated students,” said attendee Michael Smith ’18. “With a strong liberal arts background, at a competitive financial firm, within six to 12 months the liberal art graduate is on par with a [top undergraduate business school] graduate.”

Photos of the event are below: (Photos by Hannah Norman ’16)

Abigail Hornstein, associate professor of economics and James Hounsell '09 listen to Mattison Asher '17, at right,  who is one of the current leaders of the Wesleyan Investment Group (WIG).

Abigail Hornstein, associate professor of economics and James Hounsell ’11 listen to Mattison Asher ’17, at right, who is one of the current leaders of the Wesleyan Investment Group (WIG).

Grossman is Appointed Research Fellow, Journal Associate Editor

Richard Grossman

Richard Grossman

Professor of Economics Richard Grossman recently accepted two new posts. He was appointed to be a research fellow in the Economic History Program of the London-based Centre for Economic Policy Research (CEPR). Founded in 1983, CEPR’s mission is “to enhance the quality of economic policymaking within Europe and beyond, by fostering high quality, policy-relevant economic research, and disseminating it widely to decision-makers in the public and private sectors.” Grossman is one of only a few American research fellows at CEPR.

He was also recently appointed associate editor for socioeconomics, health policy and law of the journal Neurosurgery. See here for a bio of Grossman and other editors of the journal.

Imai’s Paper Examines the Prevalence of Attribution Error in Economic Voting

Masami Imai

Masami Imai

Masami Imai, professor of economics, professor of East Asian studies, is the co-author of an article titled “Attribution Error in Economic Voting: Evidence from Trade Shocks,” published in the January 2015 edition of Economy Inquiry, Volume 53, Issue 1, pages 258-257.

Rosa Hayes ’13, currently a research analyst at the Federal Reserve Bank of New York, also is one of the paper’s co-authors.

This article exploits the international transmission of business cycles to examine the prevalence of attribution error in economic voting in a large panel of countries from 1990 to 2009. Masami and his co-authors found that voters, on average, exhibit a strong tendency to oust the incumbent governments during an economic downturn, regardless of whether the recession is home-grown or merely imported from trading partners.

The authors also found an important heterogeneity in the extent of attribution error. A split sample analysis shows that countries with more experienced voters, more educated voters, and possibly more informed voters—all conditions that have been shown to mitigate other voter agency problems—do better in distinguishing imported from domestic growth.

Grossman Keynote Speaker at Chief Risk Officer Assembly

Richard Grossman

Richard Grossman

Richard Grossman, professor of economics, delivered a keynote speech at the 10th Chief Risk Officer Assembly in Munich, Germany on Nov. 19. The speech was based on his book, WRONG: Nine Economic Policy Disasters and What We Can Learn from Them (Oxford University Press), and focused the consequences of government policy for economic risk.

The CRO Assembly is organized by Geneva Association, an insurance industry think-tank, and the CRO Forum, which is made up of chief risk officers from large (primarily European) multi-national insurance and re-insurance companies. The conference took place at the headquarters of Munich RE, one of the world’s largest reinsurance companies. The program seeks to understand the nature of emerging and key strategic risks, and to understand how and where they relate to insurance.

Read more about Grossman in these past News @ Wesleyan articles.

Grossman Discussant at Economics Research Conference

Richard Grossman

Richard Grossman

On Oct. 24, Richard Grossman, professor of economics, was a discussant at a conference titled “Organizations, Civil Society, and the Roots of Development,” organized by the National Bureau of Economic Research in Cambridge, Mass.

Grossman commented on a paper by Dan Bogart (University of California at Irvine) titled “Securing the East India Monopoly: Politics, Institutional Change, and the Security of British Property Rights Revisited.” The paper focuses on the history of the English East India Company and ways it yields new insights on the relationship between politics, institutional change, and the security of property rights in Britain.