Monthly Archives: January 2017

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    Blockchain: cheap, fast and accurate (but consumes a huge amount of energy)

Blockchain: cheap, fast and accurate (but consumes a huge amount of energy)

Proponents of the blockchain technology envision a world without financial service providers. Asset ownership would thereby be recorded in a distributed, non-manipulable ledger – the blockchain – that is stored on each participant’s computer. Except for the digital currency bitcoin, this technology has not been widely applied so far. Many promises surrounding blockchain exist. The most important ones are […]

National minimum wages improve productivity

Quite unexpectedly, George Osborne, the Chancellor of the Exchequer at the time, used his first Conservative Budget, in July 2015 to slash benefits for low-paid workers – and simultaneously forced businesses to pay them more. The British Government’s new National Living Wage became law on 1 April 2016. The wage starts at £7.20, increasing to £7.50 from April 2017, […]

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    Why are so few companies satisfied with their innovations’ results?

Why are so few companies satisfied with their innovations’ results?

What would happen if a CEO publicly declared that he is against innovation and would never invest a dime on it again? He would probably be fired right away, while the company’s stock plunged! Not to mention, his statement would be quoted in B-schools for decades as an example of business myopia or, in more mundane terms, idiocy. Why? […]

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    Data on electricity demand shows a slowdown in manufacturing post-Brexit

Data on electricity demand shows a slowdown in manufacturing post-Brexit

Like many others we were frustrated about the absence of both reliable and (almost) real-time economic indicators about the true state of the economy post-Brexit. Survey data was plentifully available, but often contradicted itself, and appeared to be heavily biased towards the political leaning of the sponsor. Hence, we decided to look for a truly independent and reliable indicator, […]

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    Debunking the investment myth that high risks yield high returns

Debunking the investment myth that high risks yield high returns

My wife is a surgeon, and her field of medicine has been transformed by the ‘evidence-based’ approach. Every pill she prescribes is extensively tested and empirically validated. You will agree that this makes sense, since it directly affects our physical health.

However, when it comes to our financial health we are not yet that advanced. When somebody makes a profitable […]

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    How a shortage of coins precipitated a depression in 15th century England

How a shortage of coins precipitated a depression in 15th century England

It’s a disaster!  All the big city lenders are scaling back, or outright refusing to lend. Major players are going bust.  Overseas markets are collapsing. Regional distributors can’t get sufficient credit. Goods are piling up in warehouses. People are crying out to parliament for a major cash injection. New restrictive, even pernicious, lending practices are emerging. The economy is […]

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    Is the digital media a panacea for the ills of mass media concentration?

Is the digital media a panacea for the ills of mass media concentration?

Mass media play an important role in democracies, educating the public, providing a forum for discourse, and shaping public policy. Control of mass media by a few elites, however, is inimical to democracy as it limits the variety of messages disseminated, who can participate in discourse, and what is discussed. Yet, even in democratic countries, mass media is controlled […]

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    Aspirational Power: Brazil on the Long Road to Global Influence – Book Review

Aspirational Power: Brazil on the Long Road to Global Influence – Book Review

Aspirational Power: Brazil on the Long Road to Global Influence. David R. Mares and Harold A. Trinkunas. The Brookings Institution Press. 2016.

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Brazil’s road to global influence provides the compound metres for David R. Mares and Harold A. Trinkunas’ Aspirational Power: Brazil on the Long Road to Global Influence. Aspirational Power is a systematic treatment of the global […]

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    Is financial regulation driven by ideas or by material and structural changes?

Is financial regulation driven by ideas or by material and structural changes?

Imagine a world where Milton Friedman received more encouragement in art, and less in math as a child. Young Milton might have become an artist instead of an economist – titillating the art world with absurdist depictions of “free lunches”. Without Friedman the economist, wealthy collectors would rush to buy a “Friedman” to hedge against inflation, while grumbling about […]

January 14th, 2017|Economics, Michael Lee|0 Comments|
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    Multinationals in China: How ‘local’ should management go?

Multinationals in China: How ‘local’ should management go?

Any multinational seeking to build a strong base in China will inevitably confront the question of how ‘local’ an approach to adopt, particularly when it comes to management. Foreign firms active in Asia’s biggest market have pursued a wide variety of strategies, from flying in supervisors from head office for a transition period to train up local staff, to […]

Economic growth strategies affect female employment

Eastern European countries had the highest female employment rates in the world during the socialist period. While the transition to capitalism had an initially negative impact on labour markets across the region, by the end of the transition some of these countries managed to recover their female employment to the high levels they had experienced prior to 1989 (see […]

How to turn a Cinderella product into a market queen

Quality, we know, is often necessary, but it’s far from a sufficient condition for market status. Better technologies lose format wars — as Betamax did against the inferior VHS videotape in the 1980s, and as artisanal bakeries did to industrial mass producers.

Losing status, however, is much easier than gaining it. Ask law firms, accounting firms, even universities how they […]

Change starts with a leader’s ability to look inward

Most of us only embark on change if we can travel in ways that reinforce existing patterns. That’s the paradox. We seek a new what by comfortably using the same how.

In my work assisting leaders navigate large complex transition, I define change as the “disturbance of repeating patterns”. Unless leaders can pay as equal attention to the system-changing process […]

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    ‘Collective intelligence’ is not necessarily present in virtual groups

‘Collective intelligence’ is not necessarily present in virtual groups

Do groups of smart people perform better than groups of less intelligent people?

Research published in Science magazine in 2010 reported that groups, like individuals, have a certain level of “collective intelligence,” such that some groups perform consistently well across many different types of tasks, while other groups perform consistently poorly. Collective intelligence is similar to individual intelligence, but at […]

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    Brexit is changing the scenario for private equity in the UK

Brexit is changing the scenario for private equity in the UK

Private equity (PE) firms typically raise capital to establish limited life funds of 10-14 years duration. They use these funds to acquire a portfolio of existing firms. Each portfolio firm is acquired in a transaction which combines capital from the fund with third party debt finance. The debt is secured against portfolio firms’ assets and/or future cash flows. PE […]

Is the era of central bank independence drawing to a close?

Over the past 30 years, most central banks across the advanced economies have been given the ability to conduct monetary policy independently from interference by fiscal and political authorities. Today, almost all central banks in OECD countries are operationally instrument-independent, counting on their own tools to set or target several interest rates, even if none of them is goal-independent, […]

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    Will Trump’s strategy repatriate highly-paid manufacturing jobs?

Will Trump’s strategy repatriate highly-paid manufacturing jobs?

Trump has set out a plan to repatriate highly-paid manufacturing jobs to the US. But the idea that manufacturing jobs are better paid than service roles is a myth. Moreover, labour markets are slow to shift between sectors. An aggressive trade policy may create some jobs in manufacturing but will not be a benefit to US citizens in general.

Incoming […]

Why electric cars aren’t always environmentally sound

Electric cars are often advertised as “zero emission vehicles”. Although it is true that they don’t have tailpipes, electric cars are charged from the electrical grid, and most electric power plants release air pollution emissions through their smokestacks. So which is cleaner, tailpipes or smokestacks?

As with real estate valuation, the answer depends on three factors: location, location, location. In […]

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    Green Growth: Ideology, Political Economy and the Alternatives – Book Review

Green Growth: Ideology, Political Economy and the Alternatives – Book Review

Green Growth: Ideology, Political Economy and the Alternatives. Gareth Dale, Manu V. Mathai and Jose Puppim de Oliveira (eds). Zed Books. 2016.

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While there is broad consensus on the existence of a global environmental crisis, there are diverging opinions on the scale of the social, political and economic change required to tackle it. Placing their faith in market […]

The end of austerity? Not for the most needy

Just before announcing that he was bringing austerity to an end, Chancellor Phillip Hammond introduced a substantial reduction to the benefits cap – of £25,000 per year – that the Coalition government had imposed in 2010. The benefits available to workless households – over half of which are single parent families led by women – will now be reduced […]