Monthly Archives: November 2015

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    Too much to do, too little time? Mental contrasting can help you choose what’s really important

Too much to do, too little time? Mental contrasting can help you choose what’s really important

Working adults these days, perhaps now more than ever, often feel pressed for time. Time pressure is even more intense for working parents. The persistent sense of too-much–to-do-in-too-little-time has spawned a time management industry that by some accounts has more books and related merchandise available than that targeted at weight loss.The wisdom captured by these materials often boils down to “prioritise and organise”: […]

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    Phishing for Phools: The economics of manipulation & deception – Book Review

Phishing for Phools: The economics of manipulation & deception – Book Review

Phishing for Phools: The Economics of Manipulation & Deception. George A. Akerlof and Robert J. Shiller. Princeton University Press. 2015.

In their new book Phishing for Phools: The Economics of Manipulation & Deception, Nobel Prize winners George A. Akerlof and Robert J. Shiller deliver a timely and much-needed plea against the free market dogma that surprisingly seems to have outlived […]

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    Investing in a zero carbon economy could help the EU escape secular stagnation

Investing in a zero carbon economy could help the EU escape secular stagnation

What the downward revisions of various forecasts (IMF, OECD, OFCE) presented in early autumn 2015 tell us about the Eurozone is not very comforting. A recovery is underway, but it is both sluggish and fragile. The unemployment rate in the Eurozone is still very high (almost 11 per cent of the labour force in the second quarter), and a sluggish recovery […]

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    With manager performance metrics, the tricky question is how to reward long-term thinking

With manager performance metrics, the tricky question is how to reward long-term thinking

Some time ago I was asked to comment on a study that found that the use of accounting return measures and non-financial measures in bonus plans was associated with managers’ long-term focus. This suggests that proper performance measurement systems can affect managers’ horizon and alleviate myopia.
Myopia is indeed a pervasive issue in business, as the Kay Review suggests (amongst countless others). The blame is often squarely […]

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    Mutual funds that concentrate on a specific industry earn superior returns

Mutual funds that concentrate on a specific industry earn superior returns

International investment has gained popularity in the past two decades. Both the number of international mutual funds and assets under management have increased dramatically. These funds enable households to enjoy the diversification benefits and return opportunities provided by international markets. However, despite their increasing popularity, little is known about their investment behaviours in international financial markets: How do they allocate […]

China has an image problem in Africa

China is swiftly becoming one of the world’s largest investors, especially in Sub-Saharan Africa, with the biggest investments made in Nigeria, Sudan, South Africa and Angola. In 2012 China was estimated to have a total stock of $531 billion in investments abroad, with four percent of it — $22 billion — in Africa. A small sum at first glance, […]

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    Childcare is a central issue in women’s participation and advancement in business

Childcare is a central issue in women’s participation and advancement in business

The LSE Gender Institute has recently launched the report Confronting gender inequality — findings from the LSE Commission on Gender, Inequality and Power. Drawing on LSE research and external experts, the commission was designed to inform public and policy debates in the UK concerned with inequality and power imbalances between women and men. The work focused on the four main areas of […]

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    We need to address the role private debt and real estate play in our economies

We need to address the role private debt and real estate play in our economies

Almost no economist or financial commentator saw the 2008 crisis coming: next to no one anticipated in early 2009 that recovery would prove so difficult and slow: nobody foresaw that seven years after the crisis, interest rates today would be close to zero in all major advanced economies.

I became chair of the UK Financial Services Authority in September 2008, […]

Why Are We Waiting? – Book Review

Why Are We Waiting? The Logic, Urgency and Promise of Tackling Climate Change. Nicholas Stern. MIT Press. 2015.

In 2006, the Stern Review was published. It fast became the most reliable and extensive analysis of the economic repercussions of climate change on human systems. To those working on climate change, Professor Lord Nicholas Stern is a familiar name. He uses […]

Britain needs Europe a lot more than Europe needs Britain

The option of Britain leaving the European Union sounds superficially attractive. Who doesn’t like the idea of freedom and independence? But it isn’t as simple. In fact, Britain needs Europe a lot more than Europe needs Britain. Isolation is costly.

Look at international trade. The British economy is heavily exposed to the European Union. The EU is by a mile […]

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    Multinational firms still have a lot to learn about doing business in Africa

Multinational firms still have a lot to learn about doing business in Africa

There is an emerging consensus among academics, international agencies, and businesses that the 21st century is the African century. Democratic processes in the first decade of this century seemed to provide political stability, and resulted in not only advocacy for investments but also an increasing surge of multinational organizations into African countries. As a result, businesses, typified by multinational […]

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    Good corporate social performance may lead to higher credit ratings

Good corporate social performance may lead to higher credit ratings

Does corporate social responsibility (CSR) or Corporate Social Performance (CSP) really pay off or is it just a waste of corporate resources? In our research, we empirically examine whether superior performance in CSR results in lower credit risk, measured by credit ratings and zero-volatility spreads (z-spreads).

Until now, only a limited number of studies have investigated the CSR-CFP relationship with […]

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    Winning in challenging markets requires stronger attention to human capital

Winning in challenging markets requires stronger attention to human capital

Human capital is getting much more attention lately. The Conference Board’s 2014 survey of global CEO challenges ranked human capital issues as the number one challenge. In our work, we have found that the leadership profile of successful CEOs matches the leadership profile of effective Chief Human Resources Officers (CHROs), that HR issues are increasingly a part of firm […]

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    Business groups manage credit risk by reshuffling resources amongst units

Business groups manage credit risk by reshuffling resources amongst units

Business groups constitute a common way for ultimate owners to exercise control over a large number of companies while containing their risk exposure to different parts of the business through limited liability. In countries with underdeveloped financial infrastructures, these groups overcome difficulties in accessing external finance by reshuffling funds within the corporate structure.

Group bankruptcies tend to be large (e.g., Global […]

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    It’s time to face it: some meetings can be a waste of your time

It’s time to face it: some meetings can be a waste of your time

Many of us spend much of our time in meetings and at conferences. But too often these waste time and fail to make the most of those present.The meeting formats we use today are very old. Board meetings, assembly meetings and conferences have not changed for many hundreds of years. Newer methods include boards surrounded by screens with data, […]

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    Large EU banks have remained undercapitalised for long stretches of time

Large EU banks have remained undercapitalised for long stretches of time

The Basel Committee on Banking Supervision (BCBS) has designed complex rules for defining sufficient capital at internationally active financial institutions. Pillar II of the Basel Accord requires national supervisors to assure continuous compliance with capital standards, which require a minimum ratio of the book value of equity capital to a bank’s risky assets. An adequate Tier 1 capital ratio […]

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    Zero growth wouldn’t bring the world anywhere near the necessary reduction in CO2 emissions

Zero growth wouldn’t bring the world anywhere near the necessary reduction in CO2 emissions

Could you comment on zero-growth proposals, as opposed to delinking economic activity and greenhouse gas emissions?

“There are some that would argue that we cannot manage climate change unless we stop growing, and I think that’s a mistake. Let me just be slightly numerical to illustrate that. We are emitting as a world 50 or 51 Gigatons a year of […]

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    The Courage To Act: A Memoir of a Crisis and its Aftermath – Book Review

The Courage To Act: A Memoir of a Crisis and its Aftermath – Book Review

The Courage To Act: A Memoir of a Crisis and its Aftermath. Ben S. Bernanke. W. W. Norton and Company. 2015.

In 1913, the United States Congress established the Federal Reserve System through the Federal Reserve Act, which was signed into law by then President Woodrow Wilson. The Act purported to provide a means of responding to different stress points […]