Business & Economics

Is stock market trading good for society?

By Alex Edmans, Vivian W. Fang, and Emanuel Zur
Short-term stock traders — such as hedge funds — have come under fire for pursuing their own profits rather than the long-run health of companies they invest in. The recent financial crisis added fuel to flames, but they had started burning several decades earlier. In the 1980s, many commentators argued that Japan’s economic success resulted from shareholders taking long-term stakes and thus having incentives to improve their firms’ long-run health.

McDonald’s revisited: when globalization goes native

By David Ellwood
In January 2013 the Daily Telegraph ran a story on the refusal of the inhabitants of the famed old neighbourhood of Montmartre, in Paris, to accept the arrival in their midst for the first time of a Starbucks coffee shop. The Paris Pride heritage association denounced this “attack on the place’s soul.” A resident said “we must do everything to stop this disfiguring, as it opens the door to any old rubbish.”

IRS boondoggles: Star Trek videos and reasonable compensation cases

By Edward A. Zelinsky

Many Americans have seen the now-infamous Star Trek video made by the IRS with taxpayer funds. It is painful to watch. Captain Kirk (known in the 21st century as William Shatner) pronounced himself “appalled at the utter waste of U.S. tax dollars.” The video’s dialogue is depressingly sophomoric. The acting talents of the IRS employees are comparable to the acting talents of law professors, that is to say, nonexistent.

Mark Blyth on austerity

It is one of the most important topics in world politics and economics, yet few understand how it works and its real impact. Austerity — that toxic combination of politics and economics — must be recognized for what it is and what it costs us. The arguments for it are thin, while the evidence of its impact on wealth and income inequality is ample. For every economy to grow, this dead economic idea needs to stay dead.

Is competition always good?

By Maurice E. Stucke
Wow! That is what my university’s former football coach wanted to hear from prospective student-athletes when touring the new $45 million football practice facility. Parts of my university need repair. Departments face resource constraints. But the new practice facility was to set the standard in the university’s fierce competition for talented recruits. So our former coach led reporters through the planned 145,000 square-foot building, with its grand team meeting room, custom-designed chairs, hydro-therapy room, restaurant, nutrition bar, and lockers equipped to charge iPads and cellphones.

Buyer Beware: The case of Lysol disinfectant

By Kristin Hall
As North Americans, should we have confidence that the products we purchase are safe? Should we trust that manufacturers and advertisers keep consumer welfare in mind during the marketing process – from product conception to point of purchase? Of course we should. One would hope that corporations would have a sense of moral responsibility to act in the best interest of their customers.

Divided nations

By Ian Goldin
The growing disconnect between the problems that bind us and the countries that divide is the greatest threat to humanity. Each day we are confronted by mounting evidence of the yawning governance gap. Recently, British people have been surprised to find their meat has been through the mincer of multiple legal jurisdictions through which beef has been blended with horse.

Fools and horses

By Dick Hobbs
The news that sections of the UK public may have been munching on horse, rather than beef, has prompted renditions of an all too familiar refrain from British politicians and their cohorts in the media. “Mafia gangs” and “mobsters” have apparently combined in an “international conspiracy” to doctor the rump of the British menu in the form of cheap frozen meals.

Why are Mexicans leaving farm work, and what does this mean for US farmers?

By J. Edward Taylor and Diane Charlton
Agriculture in North America traditionally has had its comparative advantage in having access to abundant low-skilled labor from Mexico. Around 70% of the United States hired farm workforce is Mexico-born, according to the National Agricultural Worker Survey (NAWS). Fruit, vegetable, and horticultural farms in the US have enjoyed an extended period of farm labor abundance with stable or decreasing real wages.

For stronger gun control laws; against the divestiture of gun stocks

By Edward Zelinsky
Even before the events in Newtown, I supported the strengthening of gun control laws. Advocates of gun rights correctly assert the need for better enforcement of existing laws as well as the urgency of confronting the violent nature of our culture. But General McChrystal is also correct. There is no compelling reason for civilians to own or possess high capacity weaponry designed for military missions.

Don’t get taken for a ride: taxis and other “tricky” markets

By Loukas Balafoutas
Have you ever wondered if your car mechanic is charging you too much? Or been worried about taking your laptop to a computer specialist, because that might cost you almost as much as a new computer? Have you ever suspected that your taxi is driving you in circles when you were visiting a tourist destination?

Prepping for tax season

The W2s are in the mail and tax providers’ commercials on TV. Yes, it’s tax season and time for a reminder about what and why taxes are. Here’s a brief excerpt from Taxes in America: What Everyone Needs to Know by Leonard E. Burman and Joel Slemrod.

Do people tend to live within their own ethnic groups?

By Maisy Wong
There are many policies around the world designed to encourage ethnic desegregation in housing markets. In Chicago, the Gautreaux Project (the predecessor of the Moving To Opportunity program) offered rent subsidies to African American residents of public housing who wanted to move to desegregated areas. Germany, the United Kingdom, and Netherlands, impose strict restrictions on where refugee immigrants can settle. Many countries also have “integration maintenance programs” or “neighborhood stabilization programs” to encourage desegregation. These policies are often controversial as they are alleged to favor some ethnic groups at the expense of others. Regardless of the motivation behind these policies, knowing the welfare effects is important because these desegregation policies affect the location choices of many individuals.

Why the corporation is failing us, and how to restore it

By Colin Mayer

The corporation is the most important institution in the world – an institution that clothes, feeds and houses us; employs us and invests our savings; and is the source of economic prosperity and the growth of nations around the world. At the same time, it has been the cause of terrible poverty, deprivation and environmental degradation, and these problems are set to increase in the future.

Why don’t people pay off credit card debt?

By Irina A. Telyukova
In the United States, around 25% of households tend have a substantial amount of expensive credit card debt that they carry over multiple months or even years, while also holding significant liquid assets, i.e. balances in checking and savings accounts.

And the winner is… George W. Bush

By Edward Zelinsky
The American Taxpayer Relief Act of 2012 is widely understood as a victory for President Obama. However, the long-term story is more complicated than this. The Act in large measure confirms in bi-partisan fashion the tax-cutting priorities of George W. Bush.