As a second wave of COVID-19 cases makes its way around the world, the danger to the U.S. economy is clear. In this Kenan Insight, we examine the potentially damaging effects of the ongoing pandemic on an already battered workforce, and make the case for why Congress must act quickly to ensure economic stability.
Cryptocurrency has its critics, but it’s becoming an increasingly mainstream option for retail and institutional investors alike. In this Kenan Insight, we share some thoughts from former Co-president of Morgan Stanley Zoe Cruz and Rethinc. Labs Faculty Director Eric Ghysels on whether crypto has reached a tipping point for adoption by individual investors.
Cryptocurrency has its critics, but it’s becoming an increasingly mainstream option for retail and institutional investors alike. In this Kenan Insight, we share some thoughts from former Co-president of Morgan Stanley Zoe Cruz and Rethinc. Labs Faculty Director Eric Ghysels on whether crypto has reached a tipping point for adoption by individual investors.
Post-COVID, tech firms are likely to continue to spread out across America’s cities. What factors determine their choices? For cities that seek to recruit the next Amazon HQ3, what do they gain from winning the competition? And from the perspective of their lower and middle-income residents, is it good or bad if they win?
China’s remarkable economic transition was going to face slowing growth at some point, but misallocation of resources and the country’s zero-COVID policy further complicate the picture.
The availability of high quality and “clean” data documenting historical individual stock performance has had a profound impact on financial economics and the financial‐services industry.
Since 1965, average idiosyncratic risk (IR) has never been lower than in recent years. In contrast to the high IR in the late 1990s that has drawn considerable attention in the literature, average market-model IR is 44% lower in 2013-2017 than in 1996-2000. Macroeconomic variables help explain why IR is lower, but using only macroeconomic variables leads to large prediction errors compared to using only firm-level variables. As a result of the dramatic change in the number and composition of listed firms since the late 1990s, listed firms are larger and older. Larger and older firms have lower idiosyncratic risk. Models that use firm char-acteristics to predict firm-level idiosyncratic risk estimated over 1963-2012 can largely or completely ex-plain why IR is low over 2013-2017. The same changes that bring about historically low IR lead to unusu-ally high market-model R-squareds.
As the middle class shrinks and consumer debt, education and healthcare costs increase, a national conversation has focused on the wealth gap within America and the realities of the American Dream.
American Indian communities face a growing housing crisis, compounding long-standing social and economic challenges. In this Kenan Insight, we examine the structural and historic factors that underlie the current lack of affordable housing, and identify several promising options for both addressing the immediate crisis and improving the broader economic situation for tribal communities.
The jumps in the inflation rate over the last few months have been larger and longer-lasting than expected. For much of 2022 economic forecasters, including those at the Federal Reserve, assumed that higher inflation rates would be short-lived—or “transitory” using the preferred jargon of the day. Inflation was expected to start shifting back towards the Fed’s 2% target as supply-chain bottlenecks were resolved and a pandemic-induced shift in demand for consumer goods swung back toward consumer services. Instead, recent inflation prints have set 40-year records and we are seeing more discussion about the possibility of a “wage-price” spiral.
“Every business I enter is looking for employees” was a common refrain in our Carolina Across 100 survey, with 79% of the total survey sample selecting employment/staffing concerns among their top three negative impacts of COVID-19 on their organization. Is the staffing shortage just a function of COVID-19 that will correct itself as COVID abates or are there larger demographic and economic forces at work? The answer is a bit of both.
Concerns about further supply-chain troubles are on the rise. Just a few months ago the “temporary disruptions” stemming from covid were predicted to work themselves out in 2022. However, businesses are now faced with the possibility of disruptions much more severe than those experienced to date. These stem from two sources: interrupted supplies in essential raw materials and agricultural commodities resulting from Russia’s invasion of Ukraine and the potential for a rapid (and massive) spread of COVIC-19 in China resulting in suspensions to manufacturing operations there.
Much attention is being focused on energy supply security issues, especially for European oil and gas supplies. The latest Russian decision to halt natural gas sales to Poland and Bulgaria has reinforced that continent’s awareness of the perils of unreliable suppliers. Europe’s short-term focus is on sanctioning Russia and then backfilling the forgone oil and gas from other sources.
Female involvement in the workforce remains important to the U.S. economy, but COVID-19 has only exacerbated a drop in participation rates. To reverse the trend, businesses are enhancing maternity leave, child care services and access to fertility and family-planning services, according to research by UNC Kenan-Flagler Business School experts.
The Fed tried to show its inflation-fighting mettle by raising the federal funds rate, the short-term interest rate it directly controls, by 0.75 of a percentage point. This is the largest increase since 1994, though the funds rate remains at a quite low 1.625%, especially relative to the 8.6% inflation reading last week. The Fed seemed to be spooked by the inflation print — which, rather than declining as many forecasters (including myself) expected, rose to its highest level since 1981. More important, in my opinion, longer-term measures of consumer inflation expectations and uncertainty increased.
Too much or too little? Asked by German network Deutsche Welle about the Federal Reserve’s 0.75 percentage point interest rate increase July 27, Chief Economist Gerald Cohen called it just right, given that a hot job market is now accompanied by high inflation.
Kenan Institute Chief Economist Gerald Cohen discusses the power of productivity and what that means for the U.S. economy.
Stanford Institute for Economic Policy Research (SIEPR) Policy Fellow - and former Chief Economist of General Motors - Elaine Buckberg outlines how electric vehicles can save the economy as well as the environment.
As governments try to keep up with broadening economies and address new areas, such as climate change, data protection and artificial intelligence, the regulatory pace is increasing. This expansion creates new costs and requires increased business resiliency.