Olivia Drake(more…)
Lauren Rubenstein“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…
Professor of Economics Richard Grossman had an op-ed in The Hartford Courant on Jan. 5 about negotiations over the "fiscal cliff" in Washington. He writes that though reasonable people may disagree over what top marginal tax rate is ideal for the economy, the stubborn resistance of Congressional Republicans to any tax increases is the product of ideology, not reason. Looking back over history, he writes, the "abdication of sound economic reasoning in favor of ideology" has resulted in numerous policy mistakes with long-lasting economic impacts. As an historical example, Grossman cites Britain's decision to return to the gold standard following…
Assistant Professor of Economics Abigail Hornstein recently has had two academic papers published. In September 2012, her paper, "Usage of an estimated coefficient as a dependent variable," co-authored with William Greene of New York University's Stern School of Business, was published in the journal Economics Letters. The paper demonstrated the efficiency gains of a particular set of empirical estimation techniques. It is available online here. In addition, Hornstein's solo-authored paper, titled, "Corporate capital budgeting and CEO turnover," was published in December 2012 in the Journal of Corporate Finance. In this paper, she demonstrated the considerable cross-sectional and inter-temporal variation in the quality of a firm's…
On Sept. 14 and 15, Professor of Economics Richard Grossman attended a conference in Munich jointly sponsored by the Bundesbank (the German central bank) and a Munich-based research institute called CESifo. Grossman chaired a session and acted as a discussant at the conference, whose focus was, "The Banking Sector and the State." According to the conference website: "The current financial and sovereign debt crisis has shown once again that the banking sector and the state are intertwined in many ways: On the one hand, the state lends support to distressed banks and accepts risks from the private sector; in this…
Professor of Economics Richard Grossman published an op-ed in The Hartford Courant on August 7 about the global "Libor" banking scandal. Taking a lesson from the old mob-run "numbers racket," Grossman proposes an elegant solution to fixing deficits in the Libor, and renewing public confidence in the banking system. The Libor (London Interbank Offered Rate) is currently calculated by asking a group of banks to self-report the cost for them to borrow money from other banks. The highest and lowest 25 percent of submitted estimates are thrown out, and the average of the remaining submissions is the Libor. Banks are supposed to…
In this issue of The Wesleyan Connection, we ask "5 Questions" of Professor of Economics Richard Grossman. In July, Grossman spoke to the Canadian news magazine Maclean's about the Libor scandal rocking the global financial industry. Grossman's 2010 book, Unsettled Account: The Evolution of Banking in the Industrialized World since 1800, reviews banking crises over the past 200 years in North America, Europe and other regions, and considers how they speak to today's financial crises around the world. He blogs at Unsettledaccount.com. Q: Professor Grossman, what is the Libor, and what is this scandal all about? A: “Libor” is the London InterBank…
In the wake of the LIBOR banking scandal, Richard Grossman, professor of economics, commented in the Canadian news magazine Maclean’s on July 13 about banking regulation throughout history. “It’s guaranteed to be a losing battle,” he said. “The incentives in banking are so strong and the money is so big. As soon as you close off one area, someone is going to think of a new way to do things.” Grossman stressed that governments and the public have a short memory when it comes to financial crises, so that regulations that seem prudent in one era become the next generation’s “political red tape.”…
David PesciIn the midst of the banking crisis affecting the euro, John Bonin found himself in June offering banking advice to two countries that are members of the European Union, but have yet to join the monetary union linked by the euro. Bonin, the Chester D. Hubbard Professor of Economics and Social Science, professor of economics, gave the keynote address during the Annual Conference of the European Association for Banking and Financial History on June 7. The event was co-sponsored by National Bank of Romania in Bucharest, Romania. The address was titled “Two Decades of Foreign Banking in Emerging Europe: the Devil is in…
In an op-ed published in The Hartford Courant on June 24, Bill Craighead, assistant professor of economics, proposes a policy solution to avoid economic disaster as the U.S. confronts the so-called “fiscal cliff” at the beginning of 2013. As Craighead explains in the piece, the cliff refers to the simultaneous expiration of Bush-era income tax cuts and Social Security payroll tax cuts, as well as automatic cuts in government spending mandated following last year's debt ceiling stand-off. Craighead proposes that, "The tax increases could be made to occur at a more appropriate time by instituting triggering criteria that would delay…
In March, John Bonin, the Chester D. Hubbard Professor of Economics and Social Science, was a discussant regarding two papers at a conference titled “China and the World Economy,” which was held at the University of Washington in Seattle. He also participated in the board meeting for the new journal China Economic Policy Review for which he serves as an associate editor. In June, Bonin will delivering the keynote address at the European Association of Banking and Financial History Annual Conference co-sponsored by National Bank of Romania in Bucharest, Romania. His address will be titled “Two Decades of Foreign Banking in…
Iwan Djanali '09 and Damien Sheehan-Connor, assistant professor of economics, are the authors of an article, "Tax affinity hypothesis: Do we really hate paying taxes?" published in the Journal of Economic Psychology. The paper resulted from Iwan's senior thesis at Wesleyan. The article, which was published online in February, will appear in the August 2012 issue of the journal. It can be read online here. Through an experiment using 66 Wesleyan undergraduate students as subjects, Djanali and Sheehan-Connor found evidence contradicting a well-established economic principle: that people derive no utility from paying income taxes. Standard economic analysis assumes that when people…