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Which Wealth Tax? - By A. Michael Spence
Proposals for a broad tax on wealth are not new, but they are receiving renewed attention in the United States. Steadily increasing income and wealth inequality has raised social and ethical concerns, even among a subset of the wealthy. This trend, along with declining social mobility, is contributing to political polarization, which in turn leads to poor and erratic policy choices. And we know from history that rising inequality and intensifying social and political polarization can lead to more dramatic and even violent outcomes.
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Gafam: The Monopoly Hunt is Open - By Thomas Philippon
They are 50 against Google and 9 against Facebook. The New York prosecutor is leading the charge against Facebook with 8 of her colleagues and the Texas attorney has opened an investigation against Google with almost every state, but without California, where Google's headquarters is located.
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The ACCESS Act Promises to Benefit Consumers - By Robert Seamans
Today three Senators — Democratic Sens. Mark Warner (Va.) and Richard Blumenthal (Conn.), along with Republican Sen. Josh Hawley (Mo.) — are introducing a bi-partisan bill designed to increase competition between digital platforms. The bill is called the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act. Axios has the story here. You can read the actual bill here.
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How Hedge Funds Profit When Big Companies Like Thomas Cook Fail - By Marti Subrahmanyam
In September 2019, the 178-year-old global tour operator Thomas Cook “ceased trading with immediate effect.” The collateral damage associated with the liquidation was considerable: more than 20,000 employees without work, an estimated 600,000 travellers stranded around the world and repatriation and customer compensation costs north of 600 million British pounds, or almost $1 billion.
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Fannie and Freddie’s Final Makeover - By Arpit Gupta
With the U.S. Treasury’s recently released plan to revamp Fannie Mae and Freddie Mac, an important piece of government-sponsored enterprise (GSE) reform is falling into place. Over a decade has passed since the 2008 subprime mortgage meltdown and the bailout of Fannie and Freddie, so you may be asking: What took so long? The answer is that the Treasury plan—developed with input from the Federal Housing Finance Agency and the Department of Housing and Urban Development—reflects the legacy of steady administrative reforms at the GSEs that have lowered the systemic risk of these institutions.
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What’s the Point of the Economics Nobel? - By Mervyn King
Next week marks the 50th anniversary of the Nobel Prize in Economics, as it has come to be known. It was first awarded in 1969 by the Swedish central bank as an addendum to the other, much older, Nobel prizes (and is correctly known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel). This upstart status subtracts nothing from the esteem, or cash, accorded to the laureates. The latest winner, or winners, will be announced Monday.
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Trump Hasn’t Solved the Pipeline Crisis - By Paul H. Tice
America has a severe plumbing problem. When it comes to crude oil and natural gas, the country can’t seem to replace its aging pipes or put in new lines to meet market demand on a timely and cost-efficient basis. For all the current administration’s vocal support of the industry, the situation has worsened under President Trump.
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Will We Realize Blockchain’s Promise of Decentralization? - By Hanna Halaburda
Since its inception, blockchain has promised to make “trusted third parties” redundant. In practice, though, whether blockchain is actually decentralized depends on what is governed and how this governance is enacted. As more businesses explore blockchain, this distinction becomes increasingly important. There are many expected benefits from decentralization that may elude us if it fails in practice.
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In the AI Era, Privacy and Democracy Are in Peril - By Vasant Dhar
Lawmakers should not let the impeachment inquiry distract them from addressing an equally pressing issue that threatens U.S. democracy. The unchecked use of Artificial Intelligence (AI) by the major internet platforms is invading our privacy, putting our democracy at risk.
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Simple Tweak to Federal Form Could Help Potentially Avoid Defaulting on Student Loans - By Holger Mueller
A federal program seeks to help borrowers avoid defaulting on their student loans through income-based repayment plans, but many eligible borrowers do not enroll. A new study argues that an electronic pre-filled application process significantly increases the take-up rate.
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Platform Strategy: Managing Ecosystem Value Through Selective Promotion of Complements - By Melissa Schilling
New study from faculty at UCL School of Management, NYU Stern School of Business and the University of Auckland Business School shows that sophisticated platform owners manipulate which products rise to the top of featured listings.
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Measuring the Probability of a Financial Crisis - By Robert Engle
Undercapitalization in the financial sector, a sign of excessive credit growth, is a key factor in predicting the next financial crisis, according to new research by Nobel Laureate Robert Engle, Professor and Director of the Volatility Institute at the NYU Stern School of Business, and Tianyue Ruan, Professor at NUS Business School, National University of Singapore.
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Earnings of Private European Firms Are More Reliable Than Those of Public Firms, New Research Finds
New study from faculty at NYU Stern, University of Bolzano and Bocconi University shows that earnings reports are more reliable from private vs. public consolidated firms in Europe
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What Can India’s Banking System Learn from the Shampoo Sachet Revolution? - By Viral Acharya
Even seasoned statisticians can be thrown off by India’s scale. Its GDP is currently about $2.9tn, which makes it the world’s fifth-biggest economy in nominal terms and the third in purchasing power parity (PPP), only behind China and the United States.
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More Social Media Regulation - By Jonathan Haidt
Social media inflames tribalism and makes democracy more difficult and unstable in many ways. To name just a few: It accelerates the movement of citizens into informational bubbles and then poisons those bubbles with inflammatory stories and videos; it undermines trust in institutions and in fellow citizens; it allows violent ideologies to ferment and recruit; it opens a door for easy manipulation by America’s foreign enemies.
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