While the dust settles on the U.S.’s midterm elections questions abound about where the country’s international trade and economic policies go from here. As it stands the U.S. is squarely ”at a disadvantage” with countries like China argues economist Clyde Prestowitz a former trade negotiator and author of The Betrayal of American Prosperity. Wharton management professor Stephen J. Kobrin and Knowledge at Wharton spoke with Prestowitz about the elections and beyond how the U.S.’s economic leader...
Nov 10, 2010•32 min
In the U.S. infrastructure is usually silent and forgotten -- until the power goes off the ATM stops working or a neighborhood is consumed by fire. In September a 54-year-old gas pipeline exploded in San Bruno Calif. killing eight people and damaging more than 50 homes. Seven weeks earlier an oil pipeline rupture in Michigan spilled more than a million gallons of crude. According to experts the country’s infrastructure is a huge market that holds tremendous business opportunities but the bulk of...
Nov 10, 2010•13 min
The U.S. housing market has been wobbly for several years but it has shown some signs of perking up in recent months. The latest reports however indicate a setback with median home prices dropping slightly and sales well below the already depressed levels of 2009. Yet a combination of low mortgage rates and apparent home-price bargains should still be drawing some buyers into the market. Knowledge at Wharton spoke with Wharton real estate professor Susan M. Wachter about the housing market’s slo...
Oct 27, 2010•9 min
Using tax credits low-interest loans and grants the Obama Administration reportedly plans to invest more than $50 billion in electric vehicles renewable energy and a host of other clean technology -- or ”cleantech” -- ventures by the end of next year. But to what extent is today’s fast-paced investment in cleantech a victim of irrational exuberance and the herd mentality often associated with venture capitalism? Quite a lot say experts at Wharton and in the larger investment community. Hosted on...
Oct 27, 2010•12 min
Members of Generation Y -- a group of approximately 70 million young people between the ages of 15 and 30 -- are starting their careers in perhaps the worst job market since the Great Depression. Experts say the experience creates both immediate and long-term negative impacts including lower salaries now and in the future. And while their reduced spending power is not expected to have a lasting drag on the U.S. economy it does have significant repercussions for how these young people conduct the...
Oct 27, 2010•12 min
Faced with the possibility of a global currency war Western countries are increasing their scrutiny of China’s currency policies accusing Beijing of intervening in the markets to keep China’s currency weaker than it would be otherwise. In the U.S. politicians and regulators say such tactics undermine efforts to boost exports and thus take away jobs from American workers. But the controversy is more complicated than that and touches on policies and attitudes that go back decades. Knowledge at Wha...
Oct 13, 2010•25 min
France expels Roma Gypsies; a prominent German economist says migrants are destroying the country; a far-right party with an anti-immigration platform wins its first parliamentary seats in Sweden. Few countries in Europe have escaped the recent heated debates about immigration within their borders. Against this backdrop a growing body of research is helping Europeans understand whether and under what conditions immigration is economically and socially beneficial. As one Wharton expert notes ”It’...
Oct 13, 2010•16 min
As the world haltingly recovers from the recession regulators are struggling to modify the financial system to prevent another crisis. The latest effort: stricter capital requirements to help prevent large banks from collapsing under the weight of unexpected losses. While the new proposals -- called Basel III -- are designed to reduce risk-taking by assuring that banks continue lending in a weak economy Wharton faculty and others are skeptical that the new proposals will accomplish this goal. Ho...
Sep 29, 2010•11 min
After losing equity in their homes and stock portfolios Americans are now scrambling to make up lost savings by moving money into bonds and a host of other investments once considered either risky or unattractive. Although the dramatic shift in investment behavior is unlikely to have a long-term impact on the economy analysts warn that the new strategies could have a profound effect on individual investors themselves. Wharton faculty weigh in on the potential upsides and downsides that consumers...
Sep 29, 2010•12 min
AT&T and Verizon are about to throw the dice in a bet that will put billions of dollars on the line. The companies the two largest mobile phone operators in the United States are expected to launch a pilot program to see whether their customers are ready to trade credit cards for smartphones equipped with similar swipe technology for making purchases. But will Americans want to put aside their comfortable relationship with plastic credit cards? And can they overcome security concerns about a...
Sep 15, 2010•11 min
The collapse in home prices during the past few years is a reminder of the horrors of deflation. Millions of homeowners owe lenders more than their homes are worth making it impossible to sell trade up downsize or move for a new job. What would happen if deflation were to spread across the entire economy driving down wages and the prices of all goods and services? Hosted on Acast. See acast.com/privacy for more information.
Sep 15, 2010•12 min
A board’s primary fiduciary responsibility is to ensure that a CEO is generating profits for shareholders but Mark Hurd’s abrupt departure from the top job at Hewlett-Packard underscores how boards of directors do not judge a CEO’s performance on company prosperity alone. Rather boards use a broad set of intangible criteria -- ranging from how well leaders are able to earn employees’ trust to how well they deal with customers to how they conduct themselves off site -- as a way of evaluating succ...
Sep 15, 2010•15 min
It has been a battle of the balance sheets as rivals Dell and Hewlett-Packard continue to wrangle over who will win the right to acquire 3PAR a little known data storage company. While the 3PAR bidding war which HP is expected to win is part of Dell’s ongoing ambition to get a bigger foothold in high-margin enterprise technology services the $53 billion company has also been chasing consumers with lackluster products. As one expert asks: ”Dell sees the need for diversification but does it see th...
Sep 01, 2010•16 min
Despite being pilloried by the public lately a banker’s lot can’t be all that bad. At least that’s what Wal-Mart executives must be thinking. Over recent months there has been a flurry of announcements from the world’s largest retailer about the expanding array of banking products sold at its U.S. stores. Company officials insist that their main aim is to reach the ”unbanked” and ”underbanked” with the type of low-cost services that cemented Wal-Mart’s reputation as a retail giant. So do traditi...
Sep 01, 2010•15 min
When Roche Holding acquired full ownership of Genentech last year the $46.8 billion deal was the culmination of a more than 20-year relationship between the Swiss pharmaceutical giant and the Silicon Valley biotechnology company. In a recent presentation at Wharton San Francisco Steve Krognes -- a former Roche executive who is now senior vice president and CFO of Genentech -- talked about the pharma company’s decision to pursue the merger efforts to raise capital amid the beginnings of the 2008 ...
Sep 01, 2010•18 min
What inspires an employee to work harder? More money more often than not. But what about being benchmarked against peers asks Wharton management professor Iwan Barankay in a new study titled ”Rankings and Social Tournaments: Evidence from a Field Experiment.” With the help of a ”crowd-sourcing” website Barankay set out to discover not only whether workers are interested in how they rank against their peers but also what happens to their performance if they find out how they placed. His conclusio...
Aug 18, 2010•11 min
After a year of solid gains the economic recovery is beginning to slow. Demand is trailing off as inventory levels have been restored and emergency stimulus measures withdrawn. Continued high unemployment and a downtick in housing are weighing on consumer confidence and spending. Add unexpected shocks from Europe and a slowdown in China and forecasters are now ratcheting down their expectations for growth over the next year. While many still expect economic expansion to continue in the longer te...
Jul 21, 2010•14 min
While most experts agree that a single-minded focus on the short term can cause negative consequences for companies they also suggest that blaming quarterly earnings reports and the pressure to meet analysts’ targets or company guidance is like shooting the messenger. Although the system of quarterly earnings might be broken fixing it is no easy matter and might create even more pressure to produce immediate results. Hosted on Acast. See acast.com/privacy for more information....
Jul 21, 2010•17 min
China’s announcement in June that it will abandon the peg tying the renminbi (RMB) to the U.S. dollar and gradually let its currency appreciate was widely applauded in international business and economic circles. The decision is important experts say not only in debates about the future clout of the dollar and the RMB in global trade and politics but also for correcting global economic imbalances. Yet now many observers are wondering what impact the revaluation will have on jobs and prices for t...
Jul 07, 2010•15 min
Whether they are artists or executives every worker has the potential to be excellent. The challenge for any leader according to Boston Philharmonic conductor Benjamin Zander is to tap into employees’ strengths and give them the tools they need to shine. In a speech at the 14th Annual Wharton Leadership Conference Zander described how the same techniques he uses in the concert hall can be employed in creating a happier more successful business environment. Hosted on Acast. See acast.com/privacy ...
Jul 07, 2010•11 min
The recent financial crisis triggered primarily by bad bets in the financial sector has added momentum to the idea that executive compensation should be tied more closely to corporate debt rather than equity. Last month for example American International Group (AIG) announced that it will link incentive pay to the value of the troubled insurer’s bonds. In a new paper Wharton finance professor Alex Edmans and doctoral student Qi Liu argue that these types of incentives protect bondholders’ intere...
Jul 07, 2010•11 min
With the financial crisis in the United States seemingly under control Europe went into a panic of its own this spring substituting the specter of defaults on sovereign debt for the American penchant for defaults on home-mortgage debt. A stabilization package valued at nearly $1 trillion was put into place in Europe calming markets at least for the moment. But where does the euro wind up amid all this tumult? One view is that the euro is safe bolstered by a sense that it is too important to fail...
Jun 23, 2010•19 min
American companies will continue to fall behind their counterparts in emerging markets such as China or India unless they move toward what Deloitte’s John Hagel III calls ”the edge ” which is where passionate change-driven employees collaborate with others on the kind of innovations that prevent a company from seeing its core business model slowly erode. During a talk at the recent Wharton Leadership Conference Hagel discussed how CEOs can look to sources such as the online game World of Warcraf...
Jun 23, 2010•12 min
Embellishing stories about one’s accomplishments or qualifications whether by exaggeration or misstatement is part of human nature experts say and almost everyone is guilty of it at one time or another. Left unchecked however exaggerations that seemed innocuous at first can result in serious potentially career-ending consequences. Thanks to the Internet it’s easier than ever to get caught in an exaggeration Wharton experts and others note. But the temptation to embellish has also never been grea...
Jun 23, 2010•15 min
”Cap and trade” systems in which corporations that exceed their allotment of carbon dioxide emissions are allowed to purchase certificates from those with low emissions were designed to combat global climate change by giving polluters a financial incentive to reduce or offset their impact on the environment. But carbon markets in Europe and elsewhere are increasingly falling victim to fraud in the form of phishing bribery and other schemes. Wharton experts and others say combating these crimes i...
Jun 09, 2010•21 min
The call for a boycott of BP in the wake of its ongoing disastrous oil spill in the Gulf of Mexico is hardly surprising. The boycott which in BP’s case was proposed by consumer group Public Citizen is a tactic that has been used for centuries by consumers as a way to express outrage. While research shows many boycotts come up short in forcing their targets to give in to the demands of protest organizers they can have real impact in terms of lost sales and a damaged reputation. In the case of BP ...
Jun 09, 2010•16 min
What spending in the mobile advertising industry lacks in heft it more than makes up for in buzz. Witness Google’s recent purchase of AdMob which brings together the two largest mobile ad networks and Apple’s recent efforts to gain a stronger foothold in the market. The battle between the two major players could represent a tipping point for mobile advertising Wharton experts and others say and suggests that the sector could become a significant money-maker in the future. Hosted on Acast. See ac...
May 26, 2010•18 min
Sovereign wealth funds the large investment funds supported by governments are mostly a positive economic force that can provide a shot in the arm to the companies -- and countries -- they invest in. They are also a stabilizing force for the nation where the investment originates. Those are some of the main takeaways from a new Wharton study ”The Brave New World of Sovereign Wealth Funds.” In this interview with Knowledge at Wharton Wharton management professor Mauro F. Guillén who helped to ove...
May 26, 2010•27 min
Following the global financial crisis troubled retirement systems around the world face new challenges that may result in sharply reduced income for retirees -- as well as the possibility that younger workers will need to work much longer according to Wharton insurance and risk management professor Olivia Mitchell. In a recent paper titled ”Implications of the Financial Crisis for Long Run Retirement Security ” Mitchell argues that current and future generations must ”build new frameworks [with]...
May 26, 2010•13 min
It’s no secret that many Americans are financially illiterate or unable to understand basic principles of money management. To address this situation Wharton Dartmouth and the Rand Corporation have established the new Financial Literacy Center which will develop ”educational materials and programs that help foster saving and retirement strategies over the life cycle.” Annamaria Lusardi an economics professor at Dartmouth who will help lead the new Center and Michelle Greene deputy assistant secr...
May 26, 2010•16 min
