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April, 2018

 

Many results in microeconomics are shaky

MICROECONOMISTS are wrong about specific things, Yoram Bauman, an economist and comedian, likes to say, whereas macroeconomists are wrong in general. Macroeconomists have borne the brunt of public criticism over the past decade, a period marked by financial crisis, soaring unemployment and bitter arguments between the profession’s brightest stars. Yet the vast majority of practising dismal scientists are microeconomists, studying the behaviour of people and firms in individual markets. Their work is influential and touches on all aspects of social policy. But it is no less fraught than the studyRead More


Technology can tackle investors’ flaws

TECHNOLOGY has transformed finance. Consumers bank and buy their insurance policies online. They use technology to manage their pensions and other investment portfolios. But can tech improve returns? Only if it is used wisely. If it is cheaper to trade, then costs will take a smaller chunk out of long-term returns. Technology also allows fund managers to replicate stockmarket indices, giving investors access to broadly diversified equity portfolios for a fraction of a percentage point in annual fees. Get our daily newsletter Upgrade your inbox and get our Daily DispatchRead More


A market-design economist wins the John Bates Clark medal

BOSTON parents were fed up. To get their children into public schools they had to submit a list of their preferences. Spots were allocated first to those who put a school top. Only then would schools consider pupils who put them second or third. Sounds fair? Hold on. The best schools are popular. Picking them risks rejection. Good schools are sought after, too. If put second they may also fill up, leaving only places at worse schools. Should parents aim for the best and risk mediocrity, or settle for theRead More


The lapsing of Finland’s universal basic income trial

THE concept of a universal basic income (UBI), an unconditional cash payment to all citizens, has in recent years captured the imagination of a wide spectrum of people, from leftist activists to libertarian Silicon Valley techies. Proponents see a neat solution to poverty and the challenges of automation; detractors argue it would remove the incentive to work. Trials of UBI have been launched, or are about to be, in several countries. Most are publicly funded, although Y Combinator, a Silicon Valley startup accelerator, is starting a privately funded experiment inRead More


America’s antitrust apparatus prepares to act against big tech

THE rise of the big tech firms is easy to spot in downtown Chicago. Apple’s minimalist store looms over the riverfront, close to a skyscraper carrying the name of another omnipresent brand—Trump. At a bus stop a Facebook advertisement promises that its new algorithm will combat fake news. On the Magnificent Mile’s digital hoardings Google urges pedestrians to swoon into the arms of its voice-activated assistant. Inside the University of Chicago, a bastion of free-market thinkers and of free speech, tech has become more prominent, too. On April 19th andRead More


Trump voters were motivated by fear of losing their status

IN THE newly revived “Roseanne”, a popular sitcom about a white blue-collar family in the Midwest, the main character, Roseanne Connor, explains to her leftie sister why she voted for President Donald Trump. “He talks about jobs, Jackie”, she says.


Donald Trump is sending shockwaves through global commodities markets

THE notion that the gentle flap of a butterfly’s wings can cause chaos on the other side of the world is well known. But commodity markets have been tested in recent weeks by what could be called the 800-pound-gorilla effect: the idea that chest-beating in the White House can unleash turmoil in global metals, agricultural and energy markets. President Donald Trump has slapped sanctions on Russia’s biggest aluminium producer, Rusal, intensified a trade tiff with China and tweeted a gibe against OPEC, the oil-producing cartel. His actions have shaken commodityRead More


Hope I save before I get old

IF YOU reach the age of 65 in the OECD, you can expect to live for another 19 years  or so (more if you are a woman, less if you are a man). If you stop work earlier than 65, and live a bit longer than average, you could easily be retired for 25-30 years, almost as long as you were in work. But people find it very hard to get interested in pensions (even Mrs Buttonwood), even though their financial future depends on them; retirement is too distant aRead More


Antitrust with Chinese characteristics

GLOBAL deals may be growing at a rapid clip, but they seldom offer instant gratification. Qualcomm, an American chipmaker, first bid for NXP Semiconductors, a Dutch company, in October 2016. The union has since been blessed by eight regulators worldwide, but one hurdle remains: China. With no decision yet from its regulator, the companies, which were expecting to have closed the $44bn deal this week, now hope to conclude it by July. The purchase of the chip unit of Toshiba, a troubled Japanese company, by a consortium led by BainRead More


One of France’s best-known tycoons is arrested

“THIS port is for the Togolese,” says Sherif Tchedre, a mechanic standing among containers that line the shorefront in Lomé, Togo’s capital. “But it is Bolloré who runs everything.” He thinks little of the port’s French operator, Bolloré Group, or the conglomerate’s eponymous owner-boss, Vincent Bolloré. They do “nothing for Togo”, he says, adding that the Frenchman is too cosy with African presidents. The French police seem to think so, too. On April 24th they arrested Mr Bolloré and some of his firm’s senior staff in Paris on suspicion ofRead More