Lauren RubensteinIn 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…
Richard Adelstein, the Woodhouse/Sysco Professor of Economics, is the author of The Rise of Planning in Industrial America, 1865-1914, published by Routledge in March 2012. In the book, Adelstein explores the remarkable transformation undergone by business in the U.S. over the half-century following the Civil War—from small sole proprietorships and proprietorships to massive corporations possessing many of the same constitutional rights as living men and women. Approaching this story through historical, philosophical, legal and economic lenses, Adelstein presents an original, three-pronged theory of the rise of business firms. He traces the big business boom to three historic developments: a major managerial…
The influence and power wielded by large corporations in our country has never been more pronounced than it is today. But how did we get here? In a new book published this month (March 27), Woodhouse/Sysco Professor of Economics Richard Adelstein explores the remarkable transformation undergone by business in the U.S. over the half-century following the Civil War—from small sole proprietorships and partnerships to massive corporations possessing many of the same constitutional rights as living men and women. Approaching this story through historical, philosophical, legal and economic lenses, Adelstein presents an original, three-pronged theory of the rise of business firms.…
Richard Grossman, professor of economics, was a discussant at the Research Group on Political Institutions and Economic Policy at Harvard University on Dec. 3. Grossman commented on a paper, “Trade shocks, mass movements and decolonization: Evidence from India’s independence struggle,” written by Assistant Professor of Political Economy Saumitra Jha of the Stanford Graduate School of Business. David Stasavage, professor of politics at New York University, served as co-discussant on the paper along with Professor Grossman.
Olivia DrakeA paper titled "Corporate Capital Budgeting Decisions and Information Sharing" by Abigail Hornstein, assistant professor of economics, was published in the Journal of Economics and Management Strategy on Oct. 24. In the paper, Hornstein explains how firms must overcome agency and information asymmetry problems to make efficient corporate capital budgeting decisions; this is particularly true for firms with multiple units dispersed across geographic locations. Internal communication and coordination may therefore be crucial in reducing information asymmetry and achieving efficient resource allocation. We examine the relationship between corporate capital budgeting decisions and the degree of internal information sharing using a data set…
Articles by Masami Imai, director of the Freeman Center for East Asian Studies, chair and associate professor of east asian studies, associate professor of economics, were published in two economic publications: "Elections and Political Risk: New Evidence from Political Prediction Markets in Taiwan," with Cameron Shelton, appeared in the Journal of Public Economics, 95 (7-8), August 2011. "Transmission of Liquidity Shock to Bank Credit: Evidence from Deposit Insurance Reform in Japan," with Seitaro Takarabe, appeared in the Journal of the Japanese and International Economies, June 2011.
Eric GershonThis issue we ask "5 Questions" of Dick Miller, the Woodhouse/Sysco Professor of Economics, Emeritus, who retired from active teaching in 2006. Next fall, he’ll be back in the classroom with a liberal arts spin on the uses and abuses of financial accounting. Q: In the fall, you'll emerge from retirement to teach ECON 127, "Introduction to Financial Accounting," a type of course that's rarely been offered at Wesleyan. Why this course, why now and why you? A: The Economics Department has recognized that we need an accounting course in our curricular offerings, but we have difficulty in getting a visitor to…