Experience Faculty & Research

Capitalism has benefitted a few people a lot in recent years. How can we help the rest? As a reader of Worth, you’re probably in the one percent. Or maybe the 10 percent. Or maybe you’re in the top 20 percent of earners, but you aspire to join the 1 percent. Here’s one thing you have in common: In any of those scenarios, chances are that you make most of your money in the stock market, real estate and other forms of investment. Your salaried income is just the beginning. Read More...

A few years ago, as part of a Western delegation to China, I met President Xi Jinping in Beijing’s Great Hall of the People. When addressing us, Xi argued that China’s rise would be peaceful, and that other countries – namely, the United States – need not worry about the “Thucydides Trap,” so named for the Greek historian who chronicled how Sparta’s fear of a rising Athens made war between the two inevitable. In his 2017 book Destined for War: Can America and China Escape Thucydides’s Trap?, Harvard University’s Graham Allison examines 16 earlier rivalries between an emerging and an established power, and finds that 12 of them led to war. No doubt, Xi wanted us to focus on the remaining four. Read More...

In the last several years, a growing number of global apparel companies have begun having their products manufactured in Ethiopia. For these firms, Ethiopia has become the new low-wage frontier. The East African country now competes with Bangladesh, Vietnam and other South and East Asian nations for a share of the massive volume of global garment production. In this competition, Ethiopia has the dubious distinction of offering the lowest pay anywhere in the worldwide clothing supply chain—and that’s the main reason the big brands are drawn there. Read More...

This week, Chris Hughes, a co-founder of Facebook, delivered a dramatic and dire diagnosis of threats his former company poses to our society. Much of his assessment is accurate and troubling. Speaking as an insider, he provides a compelling account of just how powerful Facebook has become and the dangers associated with its dominance. Yet the prescription he proposes—breaking up the company—doesn’t address what is perhaps the most important aspect of the problem—namely, the flood of politically divisive disinformation and harmful content online. Read More...

After years of mismanagement, corruption, lack of meritocracy, and multiple step-backs on national issues, the government supported by Syriza and defectors from other parties, Greeks will soon have an opportunity to elect a parliament. It is very likely that the new government will be under the New Democracy leader, Kyriakos Mitsotakis. Read More...

The global economy is undergoing very large structural shifts, driven by three megatrends. One is the digital transformation of the foundations on which economies are built and run. Another is the growing purchasing power and economic strength of emerging economies, and China in particular. Lastly, there are broad-based political-economy trends, which include rising nationalism, various forms of populism, political and social polarization, and a possible breakdown of the multilateral framework within which the global economy has functioned since World War II. Read More...

Beginning in 2020, the Financial Accounting Standards Board (FASB) will require large financial institutions and smaller banks to estimate and report loan losses upon origination according to the Current Expected Credit Loss (CECL) standard, commonly referred to as the loan-loss rule. Read More...

Financial markets tend to undergo manic-depressive cycles, and this has been especially true in recent years. During risk-ons, investors – driven by “animal spirits” – produce bull markets, frothiness, and sometimes outright bubbles; eventually, however, they overreact to some negative shock by becoming too pessimistic, shedding risk, and forcing a correction or bear market. Read More...

“Think Different,” said the famous 1997 Apple advertisement. Excellent advice, obviously, to all creators, innovators, and entrepreneurs. But, along with thinking differently in order to come up with revolutionary new ideas or products, there is also seeing differently. Great creators, innovators, and entrepreneurs look at the world in ways that are different from how many of us look at things. This is why they see opportunities that other people miss. Read More...

If you are most people, you hear the words “United Nations Sustainable Development Goals” and your eyes start rolling back in your head. Sounds like something a bunch of people spend hours talking into microphones about and maybe something governments are supposed to be working on, but nothing to do with you as an investor. But you are oh so wrong. Read More...

In the last two years, Facebook asserts, it has focused more attention on “content governance and enforcement issues” than on any other topic.  Independent assessments, such as a 2018 NYU-Stanford study, confirm a dramatic reduction of what researchers called “fake news” on Facebook’s platform.  And yet despite this measurable progress, the company continues to send mixed signals on undertaking reform and resists making a few basic changes that would fundamentally address some of its core problems. On Sunday, in The Washington Post, Facebook CEO Mark Zuckerberg called for “new rules” to govern the Internet. While he focused on many of the right issues, the key reforms he proposed miss the mark. Read More...

For decades many of the world’s leading art museums have been the proud beneficiaries of large financial contributions from the Sackler family of New York. Sackler wings display world-class art in the Louvre in Paris, the Metropolitan Museum of Art in New York, the National Gallery in London, and numerous other museums and university art collections. These donations stem from the Sacklers’ remarkable financial success in the pharmaceutical industry, which allowed them to build a family fortune now estimated at more than $13 billion. Read More...

The global economy is weakening, in no small measure because of a deep, widespread sense of uncertainty. And a major source of that uncertainty is the ongoing Sino-American “trade war.” Read More...

The US Federal Reserve surprised markets recently with a large and unexpected policy change. When the Federal Open Market Committee (FOMC) met in December 2018, it hiked the Fed’s policy rate to 2.25-2.5%, and signaled that it would raise the benchmark rate another three times, to 3%-3.25%, before stopping. It also signaled that it would continue to unwind its balance sheet of Treasury bonds and mortgage-backed securities indefinitely, by up to $50 billion per month. Read More...

Mark Zuckerberg recently announced that Facebook will shift its focus to “private, encrypted services where people can be confident what they say to each other stays secure.” While some commentators initially applauded this statement as a 180-degree turn from the company’s past, the real import is unclear because Zuckerberg didn’t mention any plan of action. As he later acknowledged, “this isn’t a product announcement, it’s a statement of principles.” Read More...