GLOBAL ECONOMIST

2/22/2018

Too Big To Fail

What is 'Too Big To Fail'?

"Too big to fail" describes the concept whereby a business has become so large that a government will provide assistance to prevent its failure because not doing so would have a disastrous ripple effect throughout the economy. If a large company fails, companies that rely on it for portions of their income might also be extinguished along with the employment they provide. Therefore, if the cost of a bailout is less than the cost of the failure to the economy, a government may decide a bailout is the most cost-effective solution.

How does Twitter make money?

Twitter (TWTR) is a social media company that provides a network connecting users to people, information, ideas, opinions, and news. The company's services include live commentary, live connections and live conversations through mobile devices and the Internet. The company can also be used as a marketing tool for businesses.

How Twitter Makes Money

Twitter earns 86 percent or more of its revenue from advertising. In the fiscal year 2017, Twitter posted an advertising revenue of $2.1 billion, which was a six percent decrease of what the social media site brought in during the same time in 2016.

Twitter uses promoted tweets, promoted accounts and promoted trends. Twitter also sells promoted tweets to marketers, and these then appear in users' Twitter feeds. The company creates tailored advertising opportunities by using an algorithm to make sure promoted tweets make it into the right users' timelines. Promoted accounts are those paid for by an advertiser that Twitter places in targeted users' "Who to Follow" list.

Bridgewater's Dalio Sees 70 pct Chance of Recession Before 2020

Billionaire investor Ray Dalio, who founded world's largest hedge fund Bridgewater Associates, thinks there is a relatively high chance the U.S. economy will stumble into a recession before the next presidential election in 2020.

Dalio said the U.S. economy is not currently in a bubble. But he reasoned that it might not take long to get there and then to move on to a "bust" phase.

"I think we are in a pre-bubble stage that could go into a bubble stage ... The probability of a recession prior to the next presidential election would be relatively high, maybe 70 percent, Daliosaid during an appearance at the Harvard Kennedy School's Institute of Politics.

Dalio, whose fund invests some $160 billion, stepped down from the hedge fund's day-to-day operations nearly a year ago, but his views on markets and the economy are still very closely followed.

Blockchains and Bitcoin

The blockchain is perhaps the main technological innovation of Bitcoin. Bitcoin isn’t regulated by a central authority. Instead, its users dictate and validate transactions when one person pays another for goods or services, eliminating the need for a third party to process or store payments. The completed transaction is publicly recorded into blocks and eventually into the blockchain, where it’s verified and relayed by other Bitcoin users. On average, a new block is appended to the blockchain every 10 minutes, through mining.

Based on the Bitcoin protocol, the blockchain database is shared by all nodes participating in a system. Upon joining the network, each connected computer receives a copy of the blockchain, which has records, and stands as proof of, every transaction ever executed. It can thus provide insight about facts like how much value belonged a particular address at any point in the past. Blockchain.info provides access to the entire Bitcoin blockchain.

What is a 'Blockchain'

A blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions. Constantly growing as ‘completed’ blocks (the most recent transactions) are recorded and added to it in chronological order, it allows market participants to keep track of digital currency transactions without central recordkeeping. Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically.

Originally developed as the accounting method for the virtual currency Bitcoin, blockchains – which use what's known as distributed ledger technology (DLT) – are appearing in a variety of commercial applications today. Currently, the technology is primarily used to verify transactions, within digital currencies though it is possible to digitize, code and insert practically any document into the blockchain. Doing so creates an indelible record that cannot be changed; furthermore, the record’s authenticity can be verified by the entire community using the blockchain instead of a single centralized authority.

Gobal Beer Market...

Global beer market is expected to $688.4 billion by 2020.

Bitcoin and Blockchain: The Potential for Remittances and Supply Chain Management

Indian families living abroad may be able to benefit from Bitcoin, cryptocurrencies, and other blockchain innovations. Prof. Raul Dé at the Indian Institute of Management Bangalore says the technology may make remittance payments faster, cheaper, and more transparent. However, some regulation and streamlining is needed to ensure the technology reaches its peak safety and efficiency.

Rahul Dé Hewlett-Packard Chair Professor, Indian Institute of Management Bangalore

FEBRUARY 09, 2018

np.advancedmanagement.net/article/2018/02/bitcoin-and-blockchain-potential-remittances-and-supply-chain-management

Where Is the Auto Industry Headed?

Self-driving cars promise a profound change to our day-to-day experience of transportation, perhaps eliminating the scourge of congestion with clever algorithms or even turning the daily grind of the commute into a leisure hour. How this nascent technology evolves will also reshape the auto industry, pitting industrial stalwarts against tech-industry newcomers. Prof. Jeffrey Sonnenfeld spoke with former Ford CEO Mark Fields about what’s next for the car business.

MARK FIELDS

NOVEMBER 10, 2017

https://insights.som.yale.edu/insights/where-is-the-auto-industry-headed

Why Is Healthcare So Expensive?

The data covers 2007 to 2011 and more than 88 million unique individuals, or nearly one in three individuals in the U.S. with private health insurance. While it is anonymized, the data are incredibly granular. Basically, we have claims-level data for 1% of GDP each year.
There’s a lot we haven’t known about why healthcare in the U.S. is so expensive. In part, that’s because almost everything we knew came from analysis of Medicare data. Medicare covers about 16% of the population, primarily people over 65. The world of the privately insured has been a big black box, but about 60% of the country gets their coverage from private insurers and they are under 65.

ZACK COOPER FEBRUARY 12, 2016

https://insights.som.yale.edu/insights/why-is-healthcare-so-expensive

Can We Adapt to Climate Change?AUGUST 03, 2017

The rippling impacts of climate change are hitting businesses, governments, and society. Global Network experts offer assessments of some of the key systemic risks and challenges across geography and level of economic development.
https://insights.som.yale.edu/insights/can-we-adapt-to-climate-change

Can Social Enterprise Power Africa?

Two out of every three people in sub-Saharan Africa don’t have access to reliable power. Infrastructure costs put a traditional power grid out of reach for remote communities, but cheap solar home systems can transform people’s lives. Nate Heller ’09 explains the innovations that allow his social impact company to bring solar power to West Africa.

NATE HELLER

AUGUST 22, 2017

https://insights.som.yale.edu/insights/can-social-enterprise-power-africa

Can Blockchain Become the Infrastructure of Financial Services?

Blockchain software is best known for its role in creating bitcoin, but the distributed ledger technology could have an much larger impact as a secure, nearly frictionless replacement for the slow, expensive, arcane financial services infrastructure. Digital Asset’s CEO Blythe Masters sees a chance for that in the near future.

BLYTHE MASTERS

DECEMBER 28, 2017

https://insights.som.yale.edu/insights/can-blockchain-become-the-infrastructure-of-financial-services

How Do Leaders Foster Engagement and Creativity?

Workers aren’t widgets. Companies need employees who are more than three-dimensional versions of their job descriptions. Research has shown that companies are efficient and effective when a proactive, flexible, fill-in-where-there’s-a-need ethos of “organizational citizenship” is the norm. That works best when employees can go above and beyond in ways that are intrinsically meaningful to them, according to the Harvard Business Review.

So how do leaders foster a culture where workers show engagement, initiative, and creativity? Yale Insights consulted with Yale SOM’s Heidi Brooks for guidance on techniques that bring excitement, engagement, and meaning to the workplace.

HEIDI BROOKS

DECEMBER 14, 2017

https://insights.som.yale.edu/insights/how-do-leaders-foster-engagement-and-creativity

What’s the Future of Work?

The robots are coming! A Pew Research Center survey found that 72% of Americans are concerned about robots and computers taking jobs currently done by humans—though just 2% report having actually lost a job to automation.

In a conversation with Yale Insights last year, Yale SOM labor economist Lisa Kahn said that the effects of automation are already being felt throughout the economy. In fact, the Great Recession likely accelerated the process, both by slowing demand, giving firms a chance to retool without losing sales, and by providing an excuse to lay off unproductive workers.

“We have seen the influences of automation in almost every pocket of the labor market, from the very low end of the skill spectrum to the very high end,” she said. “The future of labor essentially comes down to, where are computers going to replace us and where are computers going to augment us?”

JEFF SCHWARTZ

NOVEMBER 08, 2017

https://insights.som.yale.edu/insights/what-s-the-future-of-work

What can you learn from Machiavelli?

The Prince was not even read by the person to whom it was dedicated, Lorenzo de Medici. If the truth be told, this strange little treatise for which Machiavelli is famous, or infamous, never aided—at least not in any systematic way—anyone in the actual business of governing. The most one can say about The Prince in this regard is that Kissinger and Nixon preferred it as their bedtime reading.

So why are we still reading this treatise five centuries later?

ROBERT P. HARRISON

JANUARY 01, 2011

https://insights.som.yale.edu/insights/what-can-you-learn-machiavelli

Can Better Teamwork Save Lives?

Poor coordination among members of a healthcare team can lead to higher costs and complications including death. By gathering and analyzing real-time data about how team members interact, Yale SOM’s Marissa King and her collaborators investigated whether a dedicated care coordinator can help improve outcomes—and in the process, learned just how delicate team dynamics can be.

MARISSA D. KING

FEBRUARY 08, 2018
https://insights.som.yale.edu/insights/can-better-teamwork-save-lives

The Agony and Ecstasy of the Gig Economy...

When we think about work, we usually picture office employees or factory workers clocking in and out of their jobs. But many people are no longer tethered to an organization. By one estimate, more than a fifth of the American labor force performs work that is not part of a traditional full-time job.

“The shape of work is shifting radically,” says Amy Wrzesniewski, a professor of organizational behavior at Yale SOM whose research focuses on how people experience and make meaning of their work.

In the past, most research on work identity investigated how people relate to employers. “We tended to conflate work with organizations,” Wrzesniewski says. Even when studies examined independent work, they usually focused on people who were members of occupational communities, such as freelance creative workers.

In a new study recently published in Administrative Science Quarterly, Wrzesniewski, Gianpiero Petriglieri of INSEAD, and Sue Ashford of the University of Michigan delved into the lives of independent workers. The researchers found that independent workers seemed much more sensitive to setbacks than typical employees. But the study participants also felt their work was more meaningful than an office job. “The lows are much lower; the highs are much higher,” Wrzesniewski says.

AMY WRZESNIEWSKI

FEBRUARY 20, 2018

https://insights.som.yale.edu/insights/the-agony-and-ecstasy-of-the-gig-economy

What is neuroeconomics?

Neuroeconomics tries to bridge the disciplines of neuroscience, psychology, and economics. I think of economics and psychology as really, in some sense, one discipline. I know that that's a strident statement to make, but they really are siblings separated at birth. Psychology and economics are complementary disciplines, in many cases studying the same phenomena: decision making, value-based judgment, heuristics. One side approaches it from a phenomenological, experiment-driven perspective and the other from an abstract, theoretical perspective.
J. Cohen...
https://insights.som.yale.edu/insights/what-is-neuroeconomics

Introduction to Neuroeconomics: How the Brain Makes Decisions...

Economics, psychology, and neuroscience are converging today into a unified discipline of Neuroeconomics with the ultimate aim of creating a single, general theory of human decision-making. Neuroeconomics provides biologists, economists, psychologists and social scientists with a deeper understanding of how they make their own decisions and how others decide. Neuroscience, when allied with psychology and economics, creates powerful new models to explain why we make decisions. Neurobiological mechanisms of decision-making, decisions under risk, trust and cooperation will be central issues in this course. You will be provided with the most recent evidence from brain-imaging techniques (fMRI, TMS, etc.) and introduced to the explanatory models behind them.

https://tr.coursera.org/learn/neuroeconomics

Financial Inclusion...

The Financial Inclusion Global Initiative (FIGI) is a three-year program funded by the Bill & Melinda Gates Foundation (BMGF) to support and accelerate the implementation of country-led reform actions to meet national financial inclusion targets, and ultimately the global ‘Universal Financial Access 2020’ goal.
Financial inclusion is a critical enabler for poverty reduction and inclusive growth. Access to transaction accounts opens up a pathway to broader financial inclusion, whereby people and firms can make financial transactions more efficiently and safely, access funds (whether payments, credit, savings, or other) invest in the future, and cope with economic shocks. Access to transaction accounts also enables participation in the digital economy, and is a critical building block for digital development too.

http://www.worldbank.org/en/topic/financialinclusion/brief/figi