Clark Center Forum

Planet Money; NPR, Sept 10, 2009 The dramatic collapse of financial markets in the fall of 2008 captivated the world’s attention and sent the stock market reeling. But the collapse of financial markets was a symptom of a more troubling underlying condition: U.S. households dramatically increased their leverage, or debt, from 2001 to 2007. Our research suggests […] 

National Affairs The economic crisis of the past year, centered as it has been in the financial sector that lies at the heart of American capitalism, is bound to leave some lasting marks. Financial regulation, the role of large banks, and the relationships between the government and key players in the market will never be […] 

Economist.com 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. […] 

FT.com, August 20, 2009 The US is likely to start growing over the next few quarters. But US households are likely to remain subdued, as they cope with high debt and the prospect of unemployment. As the fiscal stimulus wears off, and the massive buildup of US government debt limits spending, the world will look […] 

FT.com, August 17, 2009 Sir, Lucian Bebchuk has strongly endorsed the House of Representatives’ decision to regulate the pay structure of the entire financial sector (“Regulate financial pay to reduce risk-taking”, August 4). Financial institutions are special, argues Prof Bebchuk, because they impose costs on taxpayers that they do not internalise. This specialness warrants a […] 

Anil K. Kashyap and Takeo Hoshi During the financial crisis that started in 2007, the U.S. government has used a variety of tools to try to rehabilitate the U.S. banking industry. Many of those strategies were used also in Japan to combat its banking problems in the 1990s. There are also a surprising number of […] 

Widely cited as the father of the efficient market hypothesis and one of its strongest advocates, Professor Eugene Fama examines his groundbreaking idea in the context of the 2008 and 2009 markets. He outlines the benefits and limitations of efficient markets for everyday investors and is interviewed by the Chairman of Dimensional Fund Advisors in […] 

July 2009 Retirement saving is undergoing a fundamental change as employers shift from defined benefit pension plans to defined contribution plans, such as 401(k) accounts. Defined contribution plans have important advantages: they allow households to customize their retirement saving to their own risk preferences and circumstances, they insulate pensioners from potential bankruptcies of their employers, […] 

Paola Sapienza and Luigi Zingales Forbes, July 29th, 2009 The word for “crisis” in Chinese, weiji, is written with two characters: one (wei) means danger; the other, ji, means opportunity. That’s because every crisis challenges the status quo and in so doing creates the opportunity for something new to emerge. “This process of Creative Destruction,” […] 

Yahoo! Finance, July  20, 2009 Professor Zingales talks to Yahoo! Finance about what Wall Street will look like in 2015; a new mortgage plan; and CIT Group’s rescue plan. CIT Rescue Plan Proves Capitalism Works Wall St. in Danger of Losing Its Crown as King of Finance Time for a New Morgage Plan