Monthly Archives: May 2018

Why the Bank of England should stand its ground

Monetary policy has been unprecedentedly very accommodating in the post-global financial crisis (GFC) era, particularly in the developed economies. In the last few years, there has been a debate about the rolling back of some of the actions taken in the wake of the crisis, for which different terms and jargons have been invented, e.g. “exit-strategy” and/or “normalisation” of monetary policy. […]

May 31st, 2018|Economics|0 Comments|
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    Will it pay to be large in the EU steel industry? The answer may not be straightforward

Will it pay to be large in the EU steel industry? The answer may not be straightforward

There is a widespread belief that many of the problems that have recently plagued the EU steel industry can be resolved, or at least alleviated, by increased market concentration. Aligned with this conviction, many analysts and industry executives have positively welcomed the recent merger of the European operations of Germany’s ThyssenKrupp and India’s Tata Steel. The thinking goes that concentrating […]

Tackling non-performing loans in the euro area

The European Commission is increasing its pace towards completing the European Banking Union. A European Deposit Insurance Scheme (EDIS) should be the Banking Union’s third pillar. Germans are very sceptical of EDIS, in part because Germany has never had a single deposit insurance scheme. Instead, cooperative banks, savings banks and private banks administer their own deposit insurance systems without […]

May 30th, 2018|Finance|0 Comments|
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    Lessons from a state-imposed gender equality policy in China

Lessons from a state-imposed gender equality policy in China

In a recent study, we investigate the role that culture and institutions play in creating gender differences in willingness to compete. We compare the competitiveness of women growing up in different periods in the recent history of mainland China and Taiwan. We find that women in Beijing who grew up during the communist regime, when gender equality was emphasised, […]

May 29th, 2018|Gender|0 Comments|
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    Credit market investors may not be paying enough attention to fundamental asset volatility

Credit market investors may not be paying enough attention to fundamental asset volatility

Fixed income markets are very large. As of 31 December, 2016 there were over $12 trillion of outstanding corporate debt from companies in developed markets. Yet, despite the size of this asset class, little research has explored the role of fundamental analysis in the context of credit markets.

Default risk, i.e., the risk that a debt issuer will not make […]

May 28th, 2018|Accounting|0 Comments|
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    How to be a Geek: Essays on the Culture of Software – Book Review

How to be a Geek: Essays on the Culture of Software – Book Review

How to be a Geek: Essays on the Culture of Software. Matthew Fuller. Polity Press. 2017.

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Software is eating the world more than ever before, and we’re all facing the consequences. Airbnb is raising house prices in cities around the world; Uber and Deliveroo are preying on a pool of un- and under-employed workers to create precarious […]

May 27th, 2018|Book Review|0 Comments|
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    2018 is a crucial year for the platform-publisher relationship

2018 is a crucial year for the platform-publisher relationship

Is 2018 the year when the publisher/platform relationship is turned on its head? Is this the moment when policy-makers change the balance of power between the tech giants and the content creators?

Recent years have been tough on publishers as the social networks and search companies have grown up from transformative teens to dominating adults. Once mighty media brands have […]

The Financial Conduct Authority asks robo-advisors for more

The UK’s financial regulator has recently reviewed the offerings of the ‘robo-advice’ sector. The results, whilst superficially not encouraging, suggest teething problems rather than deeper underlying issues. In the report released in May, the Financial Conduct Authority (FCA) noted that online discretionary investment managers were not communicating risk in a clear way, lacking transparency on pricing and failing to […]

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    Big box retailers aren’t always able to squeeze small suppliers

Big box retailers aren’t always able to squeeze small suppliers

Has the rise and consolidation of ‘big box’ retailers, such as Walmart, Tesco and Carrefour, undermined the ability of suppliers, especially small ones, to earn sizeable profits? Are small suppliers that bargain with these giants doomed to earn a meagre share of the ‘channel surplus’ – the difference between retail revenues and variable production costs?

While the answer to these […]

May 24th, 2018|Economics|0 Comments|
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    How businesses in sub-Saharan Africa are adapting to climate change

How businesses in sub-Saharan Africa are adapting to climate change

Climate change poses increasing risks to economic growth and development across the world and particularly in developing countries. A critical issue is the extent to which private actors, and especially businesses, are able to adapt to climate risks. In Africa, the private sector generates two-thirds of the continent’s investment, 75 per cent of its economic output and 90 per […]

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    Corporate social responsibility and the dehumanisation of people

Corporate social responsibility and the dehumanisation of people

One of the hallmarks of moral and ethical progress in the world of business has been the increasing recognition of just how embedded organisations are in the wider social, cultural and physical environments that they occupy. It might seem a trite notion to many now, but the idea that firms influence – and are influenced by – the wider […]

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    Charting a course for investment management in the 4th industrial revolution

Charting a course for investment management in the 4th industrial revolution

The problem with the future is that it is not here yet. Virtually every aspect of our lives is in a state of flux. While change may have always been a constant, several factors come together to make this an industrial revolution of a fundamental kind. Every profession is having to grapple with existential questions as well as questions […]

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    News, Numbers and Public Opinion in a Data-Driven World – Book Review

News, Numbers and Public Opinion in a Data-Driven World – Book Review

News, Numbers and Public Opinion in a Data-Driven World. An Nguyen (ed.). Bloomsbury. 2018.

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In 1954, Darrell Huff published How to Lie with Statistics, a tongue-in-cheek guide for those wanting to use numbers to deceive. The book, now widely distributed to first-year university statistics students, outlines how statistics can confuse and muddle both writers and readers. The […]

May 20th, 2018|Book Review|0 Comments|
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    When the IMF and the EU don’t see eye to eye on economic policy

When the IMF and the EU don’t see eye to eye on economic policy

The recent IMF and World Bank Spring meetings with finance ministers and central bankers are one key forum where the IMF performs its mandated role as conduit of international economic co-ordination, and its self-appointed role as global arbiter of ‘sound’ economic policy. Christine Lagarde recently set out the IMF’s policy priorities, offering some pointed messages for European policy-makers about […]

May 19th, 2018|Economics|0 Comments|
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    Climate change: extreme heat will decrease rural employment and increase migration in Mexico

Climate change: extreme heat will decrease rural employment and increase migration in Mexico

Climate change is predicted to bring increased incidence of extreme weather events, rising temperatures, melting ice caps, and changing precipitation patterns. A growing body of literature suggests that the economic costs of climate change may be substantial and far-reaching, impacting agriculture, mortality, labour productivity, economic growth, civil conflict, and migration. Until recently, however, the literature has remained relatively silent […]

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    How much attention do investors pay to rounding in earnings forecasts?

How much attention do investors pay to rounding in earnings forecasts?

Evidence exists that investors are subject to attentional constraints when making economic decisions and as a result focus on subsets of publicly available information that are more salient, i.e. that tend to stand out and are easier to process. Selective attention to salient stimuli can be economically justified if time and attention are costly.

A large literature to date examines […]

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    Zombie firms: kept alive at the expense of investment, employment and productivity

Zombie firms: kept alive at the expense of investment, employment and productivity

With the global economy stuck in a low growth trap, it is crucial to understand the factors behind the weak recovery in potential output growth, and particularly the barriers to productivity growth. In our recent research, we show that this dynamic can be partly understood in terms of the increasing survival of zombie firms – i.e. those firms that […]

May 16th, 2018|Economics|1 Comment|
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    The quality of financial information explains why stocks and bonds co-move

The quality of financial information explains why stocks and bonds co-move

The sensitivity of corporate bond returns to changes in the value of equity is a fundamental input for portfolio asset allocation. Since imperfect correlation of asset returns is a key assumption in portfolio theory, stock-bond return co-movement is important to determine the diversification benefits of bonds, and to hedge common exposures across the two asset markets. Because bonds exhibit […]

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    Investment in education can counter the economic impact of an older population

Investment in education can counter the economic impact of an older population

Population ageing is one of the most important economic and social challenges in the twenty-first century. With increasing life expectancy and falling fertility, the populations of most countries are growing older. Large cohorts are being replaced by relatively smaller but better educated young cohorts, resulting in substantial shifts in the workforce and its age and education composition.

Although these demographic […]

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    Political ideology influences how we do business and whom we want to work with

Political ideology influences how we do business and whom we want to work with

After the bruising and contentious 2016 US presidential election and the subsequent controversies of President Donald Trump’s first year in office, it’s not surprising that Americans’ evaluations of members of the opposite political party have reached an all-time low. According to data from the Pew Research Center, 45 per cent of Republicans and 41 per cent of Democrats think the other party […]