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Stanford GSB Finance Expert: Federal Interpretation of Volcker Rule Would Lead to Constraints on U.S. Economic Growth and Recovery

January 17, 2012

Stanford Finance Expert: Federal Interpretation of Volcker Rule Would Lead to Constraints on U.S. Economic Growth and Recovery

Finance professor Darrell Duffie of the Stanford Graduate School of Business proposes alternative capital requirements for banks to eliminate potential unintended consequences of financial reform.

Professors of Wharton propose ideas: "Labor Day 2011: Not Everyone Will Be Celebrating"

KnowledgeToday, September 2, 2012.

...Acknowledging the importance of jumpstarting the economy and getting people back to work, President Obama plans to lay out a jobs agenda in a speech to Congress on Thursday.

KnowledgeToday asked several Wharton professors to each propose one idea for getting people back to work.

Peter Cappelli, director of Wharton’s Center for Human Resources and professor of management: “The most successful government policy for encouraging jobs is hiring subsidies — programs where the government gives employers some kind of subsidy for each new hire they make, usually in the form of a tax break of some kind. There has been extensive research on these programs, especially in Europe where they have been popular, and they work better than anything else at promoting new jobs. They have been tried in various forms in the U.S., mainly to help disadvantaged workers get into the labor market, but they were also used after the 1991 recession to promote hiring. While the results have not been spectacular, they are better than any other option under consideration.”

Mauro Guillén, director of the Joseph H. Lauder Institute and professor of management: “There are two types of unemployment — long-term and short-term. It is impossible to design effective policies that do not distinguish between the two...

Wharton Globalization TrendLab 2011: "Global Risk: New Perspectives and Opportunities"

Globalization TrendLab 2011: "Global Risk: New Perspectives and Opportunities, (PDF, 42 pages)" April 7-8, 2011.

From the Lauder Institute website Conference page

Page 37 and 38 have a list of the more than 30 scholars and policymakers from around the world who gathered in Philadelphia for a two-day conference.

Executive Summary

The financial and economic crisis has heightened everyone’s awareness of systemic risk. Confidence in the ability of decision-makers, policymakers and institutions to handle such risks has been shattered. Psychology, a culture of destructive self-interest, and social processes have also been invoked as part of a complex set of conditions that led to the debacle. In turn, the crisis has accelerated some prevailing demographic, economic, and social trends, including population aging, political tensions, geopolitical instability and environmental degradation, as the focus of attention has unavoidably shifted towards short-term, immediate concerns. The crisis has placed the issue of systemic risk at the top of the global agenda, forcing analysts and policymakers to make a stark distinction between what is important and what is actually urgent.

In this white paper we provide an overview of the causes, consequences, and potential solutions to the problem of risk, focusing on economic and financial aspects, while also paying attention to political, social and environmental risks associated with the crisis and its aftermath. The analysis represents the outcome of a collective, multi-disciplinary effort at understanding risk by a group of more than 30 scholars and policymakers from around the world who gathered in Philadelphia for a two-day conference.

The analysis begins with the conventional explanations of the crisis, further adding political considerations, institutional constraints, psychology, and social processes. This prepares the stage for the assessment of the effectiveness of policy interventions during the crisis which, while averting a massive meltdown, generated a number of additional problems, both short-term and long-term. Failures in global governance and in understanding complex ripple effects are also explored. Risks building up in emerging economies—from financial to political and demographic—are presented as a stark reminder that global instability is punctuated by a growing number of troubled hot spots.

The conference participants identified four action items. First, global governance needs to be enhanced, a task that is not easy as a changing of the guard takes place due to the ascendancy of the emerging economies. Second, regulation must both set parameters for self-regulation and establish a set of cushions, bells and whistles to ameliorate the possibility of further systemic crises. Third, policymakers and scholars ought to adopt a more humble attitude in terms of the extent to which they are able to understand and overcome the complexities posed by crises. And fourth, as people adopt shorter time horizons due to incentives, demographics, politics, and cognitive biases, it is important to remain on the alert for the weaknesses and faults in the global economic, political, and social architecture.

Professor Gayle Allard (IE Business School) - Will the US Congress react in time?

Post of IE Economy Blog, 21 July, 2011.

As the deadline approaches for the US Congress to either raise the debt ceiling or enter into technical default on the huge US public debt, what appears to characterize the debate is a lack of concern for what will happen if the deadline is missed.

Republicans, determined not to raise taxes, refuse to approve any compromise that would violate that objective. Democrats, reluctant to make deep reforms to social programs, want most adjustments to happen on the revenues side. The deadlock has held firm even under the time pressure of looming nonpayment on the debt.

Doing one´s duty

“In practice it is seldom very hard to do one’s duty when one knows what it is, but it is sometimes exceedingly hard to find this out.” Samuel Butler (Note Books, 1912)