The Real Effects of Capital Controls: Firm-Level Evidence from a Policy Experiment. Laura Alfaro, June 2017, Paper, “This paper evaluates the effects of capital controls on firm-level stock returns and real investment using data from Brazil. On average, there is a statistically significant drop in cumulative abnormal returns consistent with an increase in the cost of capital for Brazilian firms following capital control announcements. Large firms and the largest exporting firms appear less negatively affected compared to external-finance-dependent firms, and capital controls on equity inflows have a more negative announcement effect on equity returns than those on debt inflows. Overall, the findings have implications for macro-finance models that abstract from heterogeneity at the firm level to examine the optimality of capital control taxation.Link

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Multinationals as Global Institution: Power, Authority and Relative Autonomy. John Gerard Ruggie, June 8, 2017, Paper, “This article aims to inform the long-standing and unresolved debate between voluntary corporate social responsibility and initiatives to impose binding legal obligations on multinational enterprises. The two approaches share a common feature: neither can fully specify its own scope conditions, that is, how much of the people and planet agenda either can expect to deliver. The reason they share this feature is also the same: neither is based on a foundational political analysis of the multinational enterprise in the context of global governance.Link

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Identification and Estimation of Dynamic Causal Effects in Macroeconomics. James Stock, June 8, 2017, Paper, “An exciting development in empirical macroeconometrics is the increasing use of external sources of as-if randomness to identify the dynamic causal effects of macroeconomic shocks. This approach – the use of external instruments – is the dynamic, macroeconometric counterpart of the highly successful strategy in microeconometrics of using external as-if randomness to provide instruments that identify causal effects. This lecture provides conditions on instruments and control variables under which external instrument methods produce valid inference on dynamic causal effects, that is, structural impulse response function; these conditions can help guide the search for valid instruments in applications.Link

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Social determinants of health and the International Monetary Fund. S V Subramanian, June 9, 2017, Paper, “Education is considered an important social determinant of health (1, 2). Higher levels of educational attainment appear to be health-enhancing for those who have them (3), and provide intergenerational health benefits for their children (4) as well as their parents (5). Increased knowledge and skills leading to higher wages, as well as psychosocial advantages, such as social standing and control beliefs, are posited as mechanisms that link higher education and improved health (1, 2).Link

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Should Governments Invest More in Nudging? Cass Sunstein, June 5, 2017, Paper, “Governments are increasingly adopting behavioral science techniques for changing individual behavior in pursuit of policy objectives. The types of “nudge” interventions that governments are now adopting alter people’s decisions without coercion or significant changes to economic incentives. We calculated ratios of impact to cost for nudge interventions and for traditional policy tools, such as tax incentives and other financial inducements, and we found that nudge interventions often compare favorably with traditional interventions. We conclude that nudging is a valuable approach that should be used more often in conjunction with traditional policies, but more calculations are needed to determine the relative effectiveness of nudging.Link

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Harvard Business School Professor Explains the Most Important Problem We Have In Finance Today And How To Fix It. Mihir Desai, June 5, 2017, Video, “Mihir Desai, a professor of Harvard Business School and the author of “Wisdom of Finance” explains why having shareholders who are separate from the managers hold great danger for finance today. Following is a transcript of the video.Link

 

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Lawrence Summers on U.S. Leadership, Infrastructure. Lawrence Summers, June 5, 2017, Video, “Harvard University Charles W. Eliot Professor Lawrence Summers discusses the United States’ global leadership under President Donald Trump, CEOs support for President Trump, and the prospect of U.S. infrastructure spending. He speaks on “Bloomberg Daybreak: Americas.” (Source: Bloomberg)Link

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Race, Class, Politics, and the Disappearance of Work. Jennifer Hochschild, June 5, 2017, Paper, ““When Work Disappears” has shaped research agendas on poverty, racial hierarchy, and urban social and economic dynamics. That is a lot for one article, yet two issues warrant more analysis. They are the ways in which socially defined “race” – rather than or in combination with class – explains the impact of sustained joblessness, and the political behaviours that may emerge in response to work’s disappearance. I point to evidence showing that both race and class have independent associations with the loss of work in poor African-American communities, as well as interactive effects. In the political arena – too often neglected by sociologists studying poverty – sustained, community-wide joblessness or underemployment are associated both with withdrawal from political engagement and with the recent resurgence of right-wing populism. Even after several decades of intensive research, we have more to learn about the interactions of race, class, politics, and the disappearance of work.Link

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Paris Accord Withdrawal ‘Biggest U.S. Foreign Policy Error’ Since Iraq War. Lawrence Summers, June 2, 2017, Audio, “When President Trump announced that the U.S. will withdraw from the Paris climate accord, he explained that it was because the agreement is bad for American workers and is harming the U.S. economy.Link

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A Tax Cut Might Be Nice. But Remember the Deficit. N. Gregory Mankiw, June 2, 2017, Opinion, “In the debate about federal tax policy, one question looms large: Should we have a tax cut that increases the budget deficit? President Trump says he wants “a massive tax cut … maybe the biggest tax cut we’ve ever had.” But the Senate majority leader, Mitch McConnell, who is clearly worried about the growing national debt, says tax reform “will have to be revenue-neutral.” The stage is set for another Republican showdown.” Link

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