In this Finance survey: Stock markets around the world have seen an increasing concentration of trades in or near the closing auction. In the US, for example, about a third of all S&P 500 stock trades are now executed in the final ten minutes of the session, up from 27% in 2021 (a) The increased concentration of trading in the final minutes of the trading day has a measurably detrimental effect on market quality; (b) Strict indexing implemented with trading at the close to avoid tracking error creates a measurable performance drag that could be avoided with more flexible passive strategies
Keyword: indexing
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This Finance survey examines (a) By issuing inflation-indexed bonds, and thereby providing a long-term real safe asset for pension funds and retirement savers, governments can make a substantial contribution to social welfare; (b) Issuance of inflation-indexed bonds substantially helps government commit to a responsible fiscal and monetary policy
This week’s IGM Economic Experts Panel statements:
A: Raising the federal minimum wage to $9 per hour would make it noticeably harder for low-skilled workers to find employment.
B: The distortionary costs of raising the federal minimum wage to $9 per hour and indexing it to inflation are sufficiently small compared with the benefits to low-skilled workers who can find employment that this would be a desirable policy.
This week’s IGM Economic Experts Panel statement:
The annual indexing of Social Security benefits to increases in the consumer price index for urban wage earners and clerical workers (the CPI-W) leads to higher benefits than would be required to compensate recipients for genuine cost-of-living increases.
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