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News
Read more about the Initiative on Global Markets events, the work of visiting fellows or new insights revealed by faculty research.
Regulatory Reform
CNBC.com
February 26, 2010
Anil Kashyap discusses regulatory reform at the U.S. Monetary Policy Forum. Watch video>
Withdrawal Symptoms
The Economist
September 3, 2009
How big an influence on spending is housing wealth? Hopes for a consumer revival in countries where house prices have slumped rest, in part, on the answer. A purist view is that the value of homes has no “wealth effect” on consumption. An increase in house prices only raises the future cost of shelter. Those about to trade down or sell out receive a windfall, but first-time buyers and those hoping to buy a bigger home are worse off. The overall effect on wealth is a wash. But even if that is correct, house-price increases may still have an impact as they create housing collateral for consumers who could not otherwise borrow. A study* by Atif Mian and Amir Sufi of the University of Chicago’s Booth School of Business pins down the size of this effect, using the credit records of almost 70,000 American borrowers. Read the article>
Study Finds Women with Higher Levels of Testosterone More Likely to Take Financial Risks
Los Angeles Times
August 24, 2009
Women with more testosterone tend to behave more like men when taking financial risks, according to a new study. "Women with higher levels of testosterone turn out to be less risk averse, more willing to take risks," Luigi Zingales of the University of Chicago said in a telephone interview.
Read the article>
Reduced LBO Fees Mean 2% Disappears as Pensions Lament Losses
Bloomberg.com
July 6, 2009
Steven Kaplan Explains Changes in Management Fees for Leveraged Buyout Funds. Read the article>
Public Pensions Cook the Books
The Wall Street Journal
July 6, 2009
Robert Norvy-Marx and Joshua Rauh Find Significant Shortfalls in Public Employee Pension Plans. Read the article>
The new Geither plan is a flop
Daily News Opinion
March 25, 2009
By Luigi Zingales
On Monday, the market rallied 7% at the announcement of Treasury Secretary's Timothy Geithner's plan to deal with banks' toxic assets. Should taxpayers celebrate as well? The answer is a resounding no. Read the article>
The Fair Value Debate
Christian Laux and Christian Leuz provide a primer to help the public make sense of the recent debate over Fair Value accounting.
Read more>
Potential Adoption of IFRS by the United States
Professor Christian Leuz, with his co-authors Luzi Hail and Peter Wysocki, analyzes the economic and policy factors related to the potential adoption of International Financial Reporting Standards (IFRS) in the U.S. This report, which was requested by the FASB, was released March 11, 2009 in conjunction with the FASB's letter to the SEC's Roadmap for the Potential Use of Financial Statements Prepared In Accordance With International Financial Reporting Standards by U.S. Issuers.
Read summary>
View Report>
FASB Comment Letter>
Let's Stimulate Private Risk Taking
Wall Street Journal
January 21, 2009
By Alberto Alesina and Luigi Zingales
In virtually all economics classes, including those taught by the many excellent economists on the Obama team, the idea of government spending as an engine for growth is not a popular topic. Yet despite their skepticism of Keynesianism in the classroom, when it comes to public policy, these economists happily endorse a large stimulus package that could bring our deficit to 10% of GDP. Why?
Read more>
Culture, Gender, and Math
SCIENCE Magazine
May 30, 2008
Prof. Luigi Zingales' study suggests cultural factors may explain why boys do better in math. Read article>
China and Wal-Mart: The True Champions of Equality
by Christian Broda
FT.Com
June 4, 2008
The US presidential campaign has sometimes sounded like a contest to prove who despises trade the most. Media reports of job losses to China and the destructive effect of Wal-Mart on local businesses are ubiquitous. Read more>
Why Mr. Rajan Is Right
The Economist
April 10, 2008
An article headlined "Why Mr. Rajan is right" discussed Professor Raghuram Rajan's recommendations for reforming India's financial sector. "Financial sector reform is both a moral and an economic imperative," he argued in a report. The Economist responded: "He is right - and he deserves a lot more support than he is likely to get." Read more>
Bear Stearns Bailout Re-Energizes Fears
Chicago Tribune
March 18, 2008
Professor Raghuram Rajan was quoted in an article headlined "Bear Stearns bailout re-energizes fears." Read more>
Luigi Zingales Named "Monster Economist"
Professor Luigi Zingales was named one of five "brilliant brains behind globalization," in an article published in Corriere della Sera. Read more>
China's Impact on Latin America
Associate Professor Christian Broda discusses how China's emergence as an economic superpower is having positive impact on South America. Read more>
U.S. Monetary Policy Forum - CNBC Live Reports
February 29, 2008 at 11 a.m.
February 29, 2008 at 2 p.m.
Housing Bust Means at Least 12 More Months of Pain
Reuters
March 2, 2008
It was only nine months ago that pundits, investors and government officials, argued that the U.S. subprime mortgage crisis had been "contained." Read more>
Study Finds Wider Impact Of Mortgage Losses
Wall Street Journal
March 1, 2008
Mortgage losses, compounded by contemporary risk-management and accounting practices, could prompt banks and other lenders to shrink their lending and other assets by $2 trillion, a study concludes. Read more>
Former US Fed Official Speculates Rate Gradualism May Be Over
Wall Street Journal
February 29, 2008
The former chief monetary policy adviser of the U.S. Federal Reserve warns that as fast as central bankers have cut interest rates, they may have to raise them just as quickly. Read more>
Banks May Get More Leeway to Branch Out, Set Up ATMs
The Economic Times (India)
November 21, 2007
A committee headed by Professor Raghuram Rajan has been charged with setting an agenda for financial sector reforms in India, according to an article published November 21. One government official referred to the group as "the Raghuram Rajan committee," the article said. Read more>
Tough CEOs Often Most Successful, A Study Finds
The Wall Street Journal
November 19, 2007
Research by Professor Steven Kaplan, Assistant Professor Morten Sorensen and Mark Klebanov, a Ph.D. student, was featured in the Theory & Practice column November 19. "What are the traits that chief executives of successful companies share?" the article began. "A new study suggests that hard-nosed personal virtues such as persistence and efficiency count for more than ‘softer' strengths like teamwork or flexibility." The article was headlined "Tough CEOs Often Most Successful, a Study Finds." A picture of Professor Kaplan accompanied the article. The Times of London also ran an item about the study. Read paragraph from related IGM research>
Losing Money Is a Crime
The Wall Street Journal
November 14, 2007
Research on corporate fraud by professor Luigi Zingales and assistant professor Adair Morse was featured in an article headlined "Losing Money Is a Crime." Professors Zingales and Morse found that 7 percent of public companies engage in some form of "material" (i.e., of interest to investors) lawbreaking each year, according to the article published November 14. Most of the fraud, "involves a misrepresentation of financial statements or breach of controls that was not motivated primarily by self dealing. The bulk of these involve overstated revenue and revenue expectations," their research found. Read paragraph from related IGM research>
Self-Appraisal Is Vital for CEOs Seeking a Successful Comeback
The Wall Street Journal Online
November 8, 2007
Research by Professor Steven Kaplan on CEO turnover was featured in an article posted November 8. The return of dismissed CEOs is more common today because CEO turnover is increasing, Professor Kaplan found. The average tenure for company chief executives today is roughly six years, according to his research.
Read the article>
Read paragraph from related IGM research>
Evans Says Fed Must Guard Against 'Cost' of Bigger Housing Drop
Bloomberg
October 23, 2007
Federal Reserve Bank of Chicago President Charles L. Evans said policy makers must shield the economy from "high cost'' events such a worsening housing slump. Read the article>
Fed's Evans says U.S. economy to pick up in 2008
Reuters
October 22, 2007
Chicago Federal Reserve Bank President Charles Evans said on Monday that outside of housing the U.S. economy is "moving forward," and that the Fed cannot afford to go soft on inflation. Read the article>
Initiative on Global Markets Looks at Market Turmoil
Professors Cochrane, Kashyap and Rajan spoke at a Myron Scholes Global Markets Forum, sponsored by the Chicago Mercantile Exchange (CME) Trust and Chicago Council on Global Affairs, at the CME Auditorium September 25. on the dislocations in credit markets and offer their views on what has been happening and what policy makers can do. Read the article>
Mexican-U.S. Migration Could Flow Both Ways
Agustin Carstens, AM ’83, PhD ’85, secretary of finance and public credit of Mexico spoke at the Myron Scholes Global Markets Forum Series, which was co-sponsored by the Chicago Council on Global Affairs and funded by the CME Trust.