Experience Stern | Faculty & Research

"Instead of this half measure, Facebook should immediately decline to post deliberately false ads whenever political candidates and their supporters, whether Democrats or Republicans, seek to place them on the platform. Similarly, when people post holocaust denial content, as they still do, Facebook should take it down. And Zuckerberg should stop asserting that he allows deliberately false political content on the site because he believes in free speech. This absolutist constraint is at the root of many of the challenges they face and leaves the company with little room to maneuver effectively without contradicting itself." Read More...

"Last week, Marjorie Taylor Green easily won a Republican Congressional primary in Georgia and is likely to be elected in November to represent Georgia’s 14th Congressional District. Green is a deeply divisive candidate, who has delivered a steady stream of inflammatory attacks on Muslims, immigrants, African Americans, and Jews. She also is an avid supporter of QAnon, which occupies a dark corner of the internet, and whose followers believe that there is a worldwide network of Satan-worshiping pedophiles who control politicians and the media. With over a dozen Congressional candidates expressing support for QAnon, its growing collection of misguided and often hateful content poses an emerging threat to our democracy. Its explosive growth also underscores the inadequacy of Facebook’s efforts to address this type of political disinformation." Read More...

"When considering interventions in the banking sector during crises, governments can either use system-wide or bank-specific measures (Farhi and Tirole 2012). Bank-specific measures can be grouped into three categories (Pazarbasioglu et al. 2011) – (1) guarantees, (2) capital injections, and (3) asset restructuring/resolution – the implementation of which induces different fiscal costs (Stavrakeva 2020)." Read More...

"At the start of the year, when COVID-19 was barely on anyone's radar outside of China, the global economy was entering a fraught phase, facing a range of potentially devastating tail risks. And though the pandemic has since turned the world on its head, all of these threats remain – and some have become more salient." Read More...

"Observers of the diverse and often challenged American public pension system look north to Canada with a certain degree of admiration. Canadian public pension plans tend to be fully funded — some even have healthy surpluses. Most U.S. plans are in deficit, and several are unlikely to be sustainable. So what makes the Canadian system better? The inevitable response has to do with better governance. But it goes a lot deeper. It is the legal structure of Canadian public pension plans that enables strong governance." Read More...

"The ultra-low US policy rates that followed the 2008 Global Crisis have been coincident with significantly large positive shareholder payouts by US firms, or in other words, negative net equity issuances, largely due to higher share buybacks (repurchases) than ever in the past. Net share repurchases and total shareholder payouts (the sum of net share repurchases and dividend payouts) have increased steadily since 2001 (in absolute terms as well as relative to assets), especially so in the past decade, reaching a peak of more than $800 billion in 2018. Over this period, fixed business investment growth has failed to keep pace with firm assets, leading to lower normalised investment despite cheap funding due to aggressive monetary easing and favorable tax reforms." Read More...

"Yesterday, the State Department’s Commission on Unalienable Rights issued its draft report, the culmination of a yearlong study by a group of scholars and activists, chaired by Mary Ann Glendon of Harvard Law School, and chosen by Secretary of State Mike Pompeo. He convened the Commission to elaborate on the core principles framing the US approach to human rights, which Pompeo referred to yesterday as “our enduring dedication to unalienable rights and our tradition of constitutional self-government.” The Commission’s report has some troubling aspects, but what is most striking is the stunning gap between the broad principles the Commission articulates and the dramatic abandonment of these principles by the current administration, both at home and abroad." Read More...

"Facebook and the other social media companies are at a crossroads, in this country and around the world. The Stop Hate for Profit campaign shows that business as usual will no longer suffice. As politicians of both parties call for reform, these companies must do more than make public statements and attach labels. Instead, they should reexamine their core business models and accept responsibility for moderating their sites in a way that comports with their values and their public commitments to be a force for good." Read More...

"What is the relevance of such asset write-offs, often of staggering amounts, to investors? Is it a signal to dump the stock, as some Shell investors did on June 30?" Read More...

In a joint op-ed, Professor Marti Subrahmanyam suggests that the U.S. needs an act of solidarity, as exemplified by Alexander Hamilton in 1790, to combat the coronavirus budget crisis. Read More...

It seems investors don’t much care about the impact of data breaches on stock prices. This confounds the idea that the first line of defense against cyber-attacks should be market discipline - channeled from investor reactions through asset managers’ portfolio decisions, board governance and manager action - to get much more serious about cyber-safeguards. The evidence suggests the market-discipline defense is a lot weaker than it should be. Read More...

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"India needs external capital to grow. This has been true since the early years of Central planning following independence when India relied on external debt raised mostly by its Central and state governments from foreign governments and multilateral agencies (like the World Bank). Until the liberalisation of the economy in 1991, few Indian companies were able to do so. In the 1990s, these companies finally began to raise external equity and debt capital, mostly through Global Depositary Receipts (GDRs) and Eurobonds. After the first Indian companies were listed on stock exchanges in the United States in 1999, equity funding took the form of American Depositary Receipts and Foreign Portfolio Investment." Read More...

"The mass protests following the killing of George Floyd by a Minneapolis police officer are about systemic racism and police brutality in the United States, but also so much more. Those who have taken to the streets in more than 100 American cities are channeling a broader critique of President Donald Trump and what he represents. A vast underclass of increasingly indebted, socially immobile Americans – African-Americans, Latinos, and, increasingly, whites – is revolting against a system that has failed it." Read More...

"Many theories of international borrowing emphasize better risk sharing and the ability to draw on international savings to finance domestic growth as the two main advantages of international borrowing for a country (see for example Kletzer and Wright 2000). The first is achieved for example in case of an economic or natural calamity, when a country can then borrow to smooth consumption. Yet, it has proven difficult to empirically establish a positive correlation between a developing country’s use of foreign financing and good outcomes such as stronger economic growth (see Aizenman et al. 2004, Prasad et al 2006, and Gourinchas and Jeanne 2013). What are possible explanations for the divergence between theory and evidence?" Read More...