894 Posts Found

Investors are inundated with news about business, politics, and the global economy—and use it to assess the health of the economy, set prices, and forecast returns. But in this flood of information, what in particular are investors paying attention to?

Content: Article | Authors: Anisha Ghosh, George M. Constantinides, Michael Maiello | Source: University of Chicago | Subjects: Economics, Finance

Capitalism has a way of hijacking our culture’s best ideas. Regardless of the domain, industry turns almost every promising movement into a product.

Content: Quotation | Author: Sean Illing | Source: Vox | Subjects: Capitalism, Economics

The experience of being disastrously wrong is salutary. No economist should be denied it, and not many are.

Content: Quotation | Author: John Kenneth Galbraith | Source: The Atlantic Monthly | Subject: Economics

The economic principles of valuation don’t change that much, but McKinsey Partner Tim Koller explains why they remain more critical than ever as executives seek to address digital, geopolitical, climate, and other trends affecting their businesses.

Content: Article | Authors: Roberta Fusaro, Tim Koller | Source: McKinsey Quarterly | Subjects: Economics, Finance

Technocratic management, no matter how brilliant, cannot unwind the structural inequalities that are dismantling the American middle class. To think that it can is to be insensible of the real harms that technocratic elites, at McKinsey and other management-consulting firms, have done to America. Such obliviousness may not be malevolent; but it is clueless.

Content: Quotation | Author: Daniel Markovits | Source: The Atlantic Monthly | Subjects: Economics, Industry Specific, Management | Industry: Consulting | Company: McKinsey & Company

Here’s a chicken-or-egg finance question: Do volatility shocks in equities markets cause business-cycle downturns, or do business-cycle downturns manifest as highly volatile stock prices? Research suggests that volatility is evidence of contractionary economic conditions already in place.

Content: Article | Authors: David Berger, Ian Dew-Becker, Michael Maiello, Stefano Giglio | Source: University of Chicago | Subject: Economics

Evidence is revealing the power, limits, and confounding effects of monetary policy.

Editor’s Note: this article is from 2017 and mostly looks at Fed influences during and after the economic crisis of 2008, but the analysis is still interesting, and perhaps even timely considering the Trump administration’s attempts to influence or even control the Fed this year (2025).

Content: Article | Author: Dee Gill | Source: University of Chicago | Subject: Economics

High-skilled workers reap outsized income gains.

Content: Article | Authors: Howard R. Gold, Kevin M. Murphy, Robert H. Topel, Thomas Piketty | Source: Capital Ideas | Subject: Economics

We see this correlation between well-being and higher earnings. What’s important is that whatever’s contributing to that ability to earn higher earnings, that ability for the country to be richer, is, in some way, contributing to higher well-being to the population.

And so people who say what they care about is higher well-being do have to be concerned with economic growth. Now, that said, it’s also … [ Read more ]

Content: Quotation | Author: Betsey Stevenson | Source: McKinsey Quarterly | Subject: Economics

This idea that all that mattered was your income relative to others was an idea known as the Easterlin paradox. So we did the simplest possible thing an economist could do, which is we gathered as much data as we could from all around the world. And we confirmed it’s absolutely true that within a country at a point in time, richer people are happier … [ Read more ]

Content: Quotation | Author: Justin Wolfers | Source: McKinsey Quarterly | Subject: Economics

There are a large number of people who say the measure of a country is not its GDP—it’s the smiles, it’s the hugs, it’s the joy. It’s more than just that. It’s the meaning. And that’s true. But that doesn’t make economics irrelevant. It just says we should measure those things.

Content: Quotation | Author: Justin Wolfers | Source: McKinsey Quarterly | Subject: Economics

It’s common sense that people routinely make irrational decisions—“misbehave”—yet economics models stubbornly assume that everyone is perfectly rational. Behavioral-economics pioneer and Nobel prize winner Richard Thaler explains the divide between Econs and Humans, and the role of “choice architecture” in enabling long-term goals.

Content: Thought Leader | Authors: Jim Guszcza, Richard H. Thaler | Source: Deloitte Review | Subject: Economics

Sometimes borrowing makes sense, to borrow to invest into something productive. But if you borrow just to consume, then eventually you get in trouble and your debt ratios become too high relative to your need to pay back your debts over time. It could be a problem for households, for the business sector, financial institutions, for governments, for a country as a whole.

Content: Quotation | Author: Nouriel Roubini | Source: McKinsey Quarterly | Subjects: Economics, Finance

If we’re going to live on average to age one hundred, we are certainly not going to be retiring at 65 or anything close to 65, because we’re not going to be able to earn enough money prior to 65 to finance retirement to one hundred.

We’re going to have to rethink retirement, we’re going to have to rethink careers, and we’re going to have to … [ Read more ]

Content: Quotation | Author: Myra Strober | Source: McKinsey Quarterly | Subject: Economics

[Central banks] have installed enormous and more or less permanent backstops for financial systems and transformed lending of last resort into comprehensive “first response” functions against financial crises.

Content: Quotation | Author: Leon Wansleben | Source: strategy+business | Subject: Economics

Many perceive the markets as short-term oriented, forcing management to worry only about quarterly earnings. Our research shows that successful companies are typically those with longer-term horizons. There are plenty of investors who have long-term horizons as well, but they generally need to talk to a company only once or twice a year to make their decisions. Short-term investors are noisier. They probably drive the … [ Read more ]

Content: Quotation | Author: Tim Koller | Source: McKinsey Quarterly | Subjects: Economics, Finance

We … tend to regulate to prevent a repeat of the previous crisis rather than look in an unbiased manner at points of future vulnerability.

Content: Quotation | Author: Mike Jakeman | Source: strategy+business | Subjects: Economics, Risk Management

For the economy to grow, we need banks to accept the risk of lending, but we also need them to take the right amount of risk. Too little, and no one can borrow. Too much, and the system blows up. The rub: figuring out what that right amount is. Doing so has proven extremely difficult, even as the increasingly necessary role that banks perform has … [ Read more ]

Content: Quotation | Author: Mike Jakeman | Source: strategy+business | Subject: Economics

The Corporate Gini Index is a barometer of a competitive landscape. In other words, it measures the strength of the all-or-nothing force in an industry. The higher an industry’s index score, the more dominant a few players are within it.

In those industries in which digitization has had the greatest effect, the Gini Index tends to be high. The correlation is related to the widely observed … [ Read more ]

Content: Quotation | Authors: John Sviokla, Kelly Barnes, Miles Everson | Source: strategy+business | Subject: Economics

Dysfunctions … occur when we don’t debate value — when [value is] just presented as “this is how the economy works.” So it becomes very easy for some actors in the economy to present themselves as value creators, and in the process extract value, because the difference — what’s value creation, what’s value extraction — is no longer part of the way we think about … [ Read more ]

Content: Quotation | Author: Mariana Mazzucato | Source: strategy+business | Subject: Economics