Monthly Archives: March 2016

  • Big data
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    Blockchains may replace the institutions that safeguard commercial activities

Blockchains may replace the institutions that safeguard commercial activities

My book Blockchain: Blueprint for a New Economy highlights the possibility that blockchains are a modernising information technology that extends well beyond digital cryptocurrencies, smart contracts, and automated Dapps and DACs (distributed autonomous applications and corporations). Blockchains could engender a new Internet era that now includes payment and secure value transfer. This means that many current institutional activities might be […]

  • crowd
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    Crowdfunding solves market failures in new venture financing

Crowdfunding solves market failures in new venture financing

Entrepreneurship is essential for economic growth and employment creation. Yet despite its key role in the economy, entrepreneurs find it hard to access the financing they need to start and expand their businesses. Lack of funding is perennially identified as a major constraint on new venture growth. Moreover, traditional venture capital markets have been criticised for not being inclusive […]

  • Annual General Meeting
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    Some mutual funds do business with firms whose shares they own

Some mutual funds do business with firms whose shares they own

Major decisions in public corporations are subject to a democratic process: Proposals for change are presented at annual general meetings (AGMs), company managers indicate their preferred outcome, and shareholders then vote. Mutual funds have significant voting power by virtue of their extensive shareholdings. They also often have business ties with firms held in their portfolios because they manage company […]

  • Flood featured image
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    Cities affected by flood often keep economic activity in the vulnerable areas

Cities affected by flood often keep economic activity in the vulnerable areas

Extreme rainfall during December 2015 resulted in widespread flooding across northern England, Scotland and Ireland. With the costs of this one event potentially exceeding $2 billion, an important policy question is why so many people are hit by flooding, particularly in locations that are repeatedly inundated.

The recent events in the British Isles are just one example of a major […]

The Oxford Handbook of Creative Industries – Book Review

The Oxford Handbook of Creative Industries. Candace Jones, Mark Lorenzen and Jonathan Sapsed (eds). Oxford University Press. 2015.

The relevance of cultural and creative industries is on the rise worldwide; the number of people involved in them in various capacities and the economic importance of the sector are increasing. Hence, this book, edited by Candace Jones, Mark Lorenzen and Jonathan […]

Britain needs the EU much more than vice versa

Britain earns 13 per cent of its GDP by exporting goods and services to the other EU members. In turn, these other EU members earn less than 4 per cent of their GDP by sending goods and services across the Channel. Britain accounts for a mere 17 per cent of the joint GDP of the EU.

As a result of […]

It’s time to reform the price of water

One of the first things most students of economics learn is the diamond and water paradox. How can it be that water is free even though life cannot exist without it, while diamonds are expensive although no one dies for lack of diamonds? The answer is that water can be free if its supply is abundant relative to demand. Nevertheless, […]

How can companies read early signals of change and adapt?

The world’s economies apparently change at random, reacting unforeseeably. However, certain large-scale processes can be understood and predicted as inter-related, evolving mechanisms driving business, government, and societal behaviour and decision-making. The DRIVE framework shows how the future could unfold through five such processes.

First are the demographic and social changes resulting from current models of population growth. All countries are […]

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    Men are targets of sexual harassment at work far more commonly than we assume

Men are targets of sexual harassment at work far more commonly than we assume

More than one in ten complaints of sexual harassment at work are reported by men. In a recent study, I found that the majority of cases (78.4 per cent) were female complaints against males. However, women were accused of sexually harassing men in 5 per cent of cases and men accused other men in 11 per cent of cases.

The […]

Musicians are exploited on the London and Paris jazz scenes

As recorded music revenues decline, live music is increasing in economic importance. But working conditions in the sector are a problem. Live musicians frequently suffer from low pay, casualised work contracts, and unpredictable and insecure careers. These concerns have serious knock-on effects. They skew opportunities towards those from affluent backgrounds, who can tolerate periods of deep career uncertainty. And […]

  • Bologna view
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    The more universities in a country, the faster its economic growth

The more universities in a country, the faster its economic growth

In 1900, only one in a hundred young people in the world were enrolled at universities, but over the course of the twentieth century this rose to one in five.  It turns out that this enormous expansion of the higher education sector was not just the product of riches – it has helped fuel economic growth.

We compiled new data […]

CEOs strategically time news releases for their own benefit

More and more firms seek to set long-term incentives for their managers. One way to do so is to restrict executives from selling stock and options for a certain period, typically three years. When such stock and options finally become available (“vesting”), many executives are eager to sell.

One easy way to boost short-term stock prices is to release news. Even […]

  • Spitalfields Market
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    The question is not ‘if’ but ‘how much’ Brexit would cost the UK

The question is not ‘if’ but ‘how much’ Brexit would cost the UK

There are many issues that will weigh in the minds of voters in the run up to the 23rd June EU referendum. Many people feel that they are oppressed by a remote, undemocratic super-state that can over-rule British laws. Others believe that the EU promotes better co-operation between communities that were at war for centuries. These views often stem from deeply […]

  • small business
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    Could export opportunities convince small and medium firms the UK should stay in the EU?

Could export opportunities convince small and medium firms the UK should stay in the EU?

QuoteSearcher commissioned a follow up study on small and medium enterprises (SMEs) decision makers and their opinions on exporting in the European Union and worldwide. The original study was a YouGov survey on SME decision makers to understand their opinions on the EU and what effect, in any, a “Brexit” would have on their businesses. One of the key findings from […]

  • M&A
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    Mergers that aim at increasing revenue only work with the customers’ blessing

Mergers that aim at increasing revenue only work with the customers’ blessing

When one company acquires or merges with another one in search of revenue synergies, they both face greater risks than if they were aiming at cost synergies: while cost synergies can be forced top-down, revenue synergies depend on customers’ reactions.

Business leaders often equate “risk” to “things can go wrong”. This notion is reinforced by stories of catastrophes (like the merger of AOL […]

  • Basu - India
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    An Economist In The Real World: The Art of Policymaking in India – Book Review

An Economist In The Real World: The Art of Policymaking in India – Book Review

An Economist In The Real World: The Art of Policymaking in India. Kaushik Basu. MIT Press. 2015.
Documenting India’s growth story is always an uphill task, primarily because it is not an easy one to unpick. An attempt to calculate its future is complicated by the huge and growing population, and the vast, unruly administrative system mired in corruption. Professor […]

  • canary wharf
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    There are clear divisions in the UK’s financial services sector over a Brexit

There are clear divisions in the UK’s financial services sector over a Brexit

Until recently the City has sought to maintain a low profile on Brexit. For an industry still very much in the public gaze, there is little incentive to stick their head above the parapet as long as the outcome of the referendum result remains shrouded in uncertainty.

Finance, above all else, is deeply uncomfortable about making public interventions into politics […]

People first resist but later tend to embrace garbage taxes

People do not like taxes. This is a recurrent fact in many contexts. Sometimes people do not like taxes even though they work just fine. Environmental taxes represent a good example. In most cases, environmental taxes aim at changing behaviour, not raising fiscal revenues. Yet, they are seen with suspicion by the population, and their effectiveness is often challenged.

But sometimes […]

  • CME
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    Institutions that settle market transactions need strong corporate governance

Institutions that settle market transactions need strong corporate governance

There have been a variety of systemically important banking issues making the headlines since the global recession of 2008, but the challenge to mitigating credit risk during settlement seems to be a constant frontrunner. This article discusses the importance of effective liquidity management, particularly from the sphere of timely payment settlement via financial market utilities (FMUs), defined as “multilateral systems that […]

  • Euston_station
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    Osborne’s goal to eliminate borrowing will squeeze public investment

Osborne’s goal to eliminate borrowing will squeeze public investment

The 2016 Budget had far less to do with economics than with keeping business and Conservative backbenchers happy in the run up to the June EU referendum. That is an entirely sensible set of priorities since the economic shock of Brexit potentially exceeds by far any impacts likely to arise from the Budget.

The Budget had, nonetheless, two significant points […]