The Flummery of Capital-Requirement Repairs Since The Crisis

Government safety nets give protected institutions an implicit subsidy and intensify incentives for value-maximizing boards and managers to risk the ruin of their firms. Standard accounting statements do not record the value of this subsidy and forcing subsidized institutions to show more accounting capital will do little to curb their enhanced appetite for tail risk.  Read more

Please Don't Throw Me In The Briar Patch

Author: 

 September 8, 2014

 

PLEASE DON’T THROW ME IN THE BRIAR PATCH: THE FLUMMERY OF CAPITAL-REQUIREMENT REPAIRS UNDERTAKEN IN RESPONSE TO THE

GREAT FINANCIAL CRISIS*

Edward J. Kane

Boston College

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To Boost Investment, End SEC Rule Encouraging Buybacks

The New York Times is having a "Room For Debate" discussion on its Opinion Page about how corporations should handle profits based on the Harvard Business Review article “Profits Without Prosperity” by William Lazonick of the University of Massachusetts Lowell, who is a grantee of the Institute for New Economic Thinking. Read more

Stephen Kinsella: Austerity Defangs the Celtic Tiger

As we approach the impending independence referendum in Scotland, it is noteworthy that we no longer hear economic comparisons between the so-called “Celtic Lion” and its neighbor to the West, the once “Celtic Tiger” of Ireland.  
 
Ireland was the first of the EMU nations to embrace the austerity mantra, the first of the governments to openly engage in economic policy malpractice by abandoning their responsibilities to advance public purpose. As Stephen Kinsella of the University of Limerick notes in this interview, for all the hope of the “mangy cat” again becoming the “Celtic Tiger,” Ireland remains in pretty sorry condition. 
 

All Together Now?: Inequality and Growth in US Metro Areas

By Chris Benner and Manuel Pastor

With the publication of Thomas Piketty’s Capital in the 21st Century, the American public has become increasingly concerned about the scale and impact of inequality in economic life. Read more

Shadow Banking - The Money View

Author: 

Presentation slides from a meeting with the Young Scholars Initiative on 8/29/2014.

Judy Tsui Joins Institute as Special Advisor in China

The Institute for New Economic Thinking is proud to announce that Dr. Judy Tsui is joining the organization as a Senior Advisor in China.

The Institute, which has held conferences in Hong Kong and Tsinghua, China, is in the process of building a strong presence in Asia. Dr. Tsui will play a key role developing these programs and spreading the Institute’s message about the need for new ideas to replace outmoded ways of thinking about the economy. Read more

Katharina Pistor: Creating A Legal Foundation For Finance

We have an increasingly complex financial system and a correspondingly complex system of regulation to go with it. Constructing a proper regulatory framework not only entails an understanding of economics and finance, but also law, since much of the regulation is enacted via legislation.  
 
So how does the law interact with finance?  
 
To answer that question, Katharina Pistor, a grantee of the Institute for New Economic Thinking, professor at Columbia University Law School, and the director of Columbia’s Center on Global Legal Transformation, is developing a Legal Theory of Finance that makes big strides in this area. 
 

James Heckman: Early Interventions Lead To Higher IQs

The Jesuits used to argue that if they could get someone in their church by age five, they’d have them hooked for life.  
 
Nobel Laureate James Heckman doesn’t go quite so far in his ideas for early childhood education, but he does suggest that the years between birth to preschool are crucial in helping to boost IQ scores, enhancing overall educational standards, and therefore improving the economic future of the less advantaged amongst us.
 

FT Scholars at the Institute's Human After All Conference

In April 2014, the Financial Times supported the Young Scholars Initiative by sponsoring scholarships for seven students from around the world to attend the Institute's Human After All conference in Toronto. With more than 600 submissions, interest was overwhelming. Read more