How the world has become much better and why optimism is abundantly justified Why do so many people fear the future? Is their concern justified, or can we look forward to greater wealth and continued improvement in the way we live? Our world seems to be experiencing stagnant economic growth, climatic deterioration, dwindling natural resources, and an unsustainable level of population growth. The world is doomed, they argue, and there are just too many problems to overcome. But is this really the case? In Fewer, Richer, Greener, author Laurence B. Siegel reveals that the world has improved—and will continue to improve—in almost every dimension imaginable. This practical yet lighthearted book makes a convincing case for having gratitude for today’s world and optimism about the bountiful world of tomorrow. Life has actually improved tremendously. We live in the safest, most prosperous time in all human history. Whatever the metric—food, health, longevity, education, conflict—it is demonstrably true that right now is the best time to be alive. The recent, dramatic slowing in global population growth continues to spread prosperity from the developed to the developing world. Technology is helping billions of people rise above levels of mere subsistence. This technology of prosperity is cumulative and rapidly improving: we use it to solve problems in ways that would have be unimaginable only a few decades ago. An optimistic antidote for pessimism and fear, this book: Helps to restore and reinforce our faith in the future Documents and explains how global changes impact our present and influence our future Discusses the costs and unforeseen consequences of some of the changes occurring in the modern world Offers engaging narrative, accurate data and research, and an in-depth look at the best books on the topic by leading thinkers Traces the history of economic progress and explores its consequences for human life around the world Fewer, Richer, Greener: Prospects for Humanity in an Age of Abundance is a must-read for anyone who wishes to regain hope for the present and wants to build a better future.
In the last 250 years the world has gone from poor to rich, sick to healthy, and isolated to connected. We still face many problems, but we are constantly discovering new ways to solve them. Investment returns have also reflected these improvements, and have rewarded patient investors for providing the capital needed to achieve this progress. Yet we seem to have arrived in this place without much of an idea of how we did it, and many are uncertain about whether the future will be worth living in. In Unknown Knowns, Laurence B. Siegel, author of Fewer, Richer, Greener, shows why the future will be even better than the past. In addition, reflecting on his career as an investment manager, Siegel presents practical advice for investors, based on a solid grounding in economics. This book consists of articles, book reviews, and interviews, many written with Siegel's valued co-authors. The book reviews and interviews provide a window into some of the greatest minds in economics and investment management, including Jack Bogle, Mohamed A. El-Erian, Paul Volcker, and Nassim Taleb. The articles unravel some of the greatest mysteries that now confront us, from the retirement and pension crisis to the future of democracy and liberalism. Some of the ground covered includes: Progress, growth, and productivity Investing and finance Savings and retirement Monetary policy and inflation Policy and governance, and Provocative takes on the big questions in economics, social science, and human affairs. Filled with stories, anecdotes, personalities, and data, this book provides refreshing and useful perspectives. It can help you grasp some of the wrenching changes of the last decade and anticipate those to come, leading you more deeply into the fields of economics, investing, and progress - all conveyed with a sense of humor and an appreciation for the folly as well as the wisdom that surrounds us.
How the world has become much better and why optimism is abundantly justified Why do so many people fear the future? Is their concern justified, or can we look forward to greater wealth and continued improvement in the way we live? Our world seems to be experiencing stagnant economic growth, climatic deterioration, dwindling natural resources, and an unsustainable level of population growth. The world is doomed, they argue, and there are just too many problems to overcome. But is this really the case? In Fewer, Richer, Greener, author Laurence B. Siegel reveals that the world has improved—and will continue to improve—in almost every dimension imaginable. This practical yet lighthearted book makes a convincing case for having gratitude for today’s world and optimism about the bountiful world of tomorrow. Life has actually improved tremendously. We live in the safest, most prosperous time in all human history. Whatever the metric—food, health, longevity, education, conflict—it is demonstrably true that right now is the best time to be alive. The recent, dramatic slowing in global population growth continues to spread prosperity from the developed to the developing world. Technology is helping billions of people rise above levels of mere subsistence. This technology of prosperity is cumulative and rapidly improving: we use it to solve problems in ways that would have be unimaginable only a few decades ago. An optimistic antidote for pessimism and fear, this book: Helps to restore and reinforce our faith in the future Documents and explains how global changes impact our present and influence our future Discusses the costs and unforeseen consequences of some of the changes occurring in the modern world Offers engaging narrative, accurate data and research, and an in-depth look at the best books on the topic by leading thinkers Traces the history of economic progress and explores its consequences for human life around the world Fewer, Richer, Greener: Prospects for Humanity in an Age of Abundance is a must-read for anyone who wishes to regain hope for the present and wants to build a better future.
Research into the equity risk premium, often considered the most important number in finance, falls into three broad groupings. First, researchers have measured the margin by which equity total returns have exceeded fixed-income or cash returns over long historical periods and have projected this measure of the equity risk premium into the future. Second, the dividend discount model—or a variant of it, such as an earnings discount model—is used to estimate the future return on an equity index, and the fixed-income or cash yield is then subtracted to arrive at an equity risk premium expectation or forecast. Third, academics have used macroeconomic techniques to estimate what premium investors might rationally require for taking the risk of equities. Current thinking emphasizes the second, or dividend discount, approach and projects an equity risk premium centered on 3½% to 4%.
The fiscal theory of the price level (FTPL) provides an update and revision of monetary theory to address puzzles raised by the failure of both the new Keynesian theory (commonly used by central bankers) and neoclassical monetarism (in particular, the quantity theory of money as interpreted by Milton Friedman and Anna Schwartz)—puzzles such as the low inflation that followed the sustained expansionary monetary policies post-2008. We aim to summarize and explain the FTPL as developed by Eric Leeper, John Cochrane, and others. The FTPL builds on neoclassical monetarism by observing that government liabilities—bonds, notes, bills, and currency—derive their value from the assets that back these liabilities. These assets are chiefly the present value of future tax revenues, minus government spending other than that part of spending used to service the liabilities themselves. This net “profit” of the government is called the primary surplus. This primary surplus can be expressed in real terms (a quantity of goods and services, rather than a money amount). The total real value of the bonds is thus the total real value of the assets backing the bonds: the present value of all future real primary surpluses (which we shorten to PVFS, present value of future surpluses). In a very important sense, the FTPL harkens back to commodity-based theories of money, except now the “commodity” is the real value of future surpluses earned by the government. We can then solve for the price level. It is simply the nominal value of the bonds (the face value or number of bonds issued) divided by the real value of the bonds (the PVFS). If the nominal value of the bonds is held constant and the underlying asset (PVFS) becomes less valuable, prices go up. If the PVFS becomes more valuable, prices go down. We thus calculate the value of “money” (including government liabilities of all maturities) the way one would calculate the value of any security: through discounted cash flow analysis. Note that this approach is consistent with the QTM because, if money is defined in the traditional way as currency and demand deposits and we now hold the PVFS (the backing of the money) constant, then the price level is proportional to the amount of money in circulation. The FTPL is a more complete theory, however, because (1) it incorporates all government liabilities, not traditional money alone, and (2) because it is forward-looking and dynamic rather than considering only conditions in the present.
In 2019, MIT hosted a 75th birthday symposium in honor of Robert C. Merton. The event included presentations by students and colleagues explaining the influence Merton has had on the profession and on their ideas. Each presenter focused on a specific aspect of Merton’s life and contributions so that the audience could gain a full picture of Merton’s influence while avoiding repetition across presentations. The brief contains edited transcripts of some of the speeches and panel discussions that took place at the symposium. The presentations cover Merton’s career, highlighting both his foundational work on continuous time finance and the functional approach to understanding organizations as well as recent work on retirement security and trust. Some of the presentations unveil new aspects of his life. Merton’s father, Robert K. Merton, was one of the most important sociologists of the 20th century, being the originator of concepts such as role model, unanticipated consequences, and self-fulfilling prophecies. Another of the presentations makes a convincing case for Merton as the first financial engineer; the presenter argues that a body of knowledge becomes a science when a field of engineering emerges from it. If that is the case, this brief achieves two goals. It celebrates the influence of Merton on the theory and practice of finance through a series of engaging presentations, and it traces the birth of finance as a science on its own.
This brief is based on a conference that marked the 10-year anniversary of the global financial crisis. It explores the origins of and response to the crisis and the lessons learned from it.
Incorporating theory & practice, this textbook was developed to help guide professors faced with the challenge of teaching a comprehensive survey course of global finance through a complex international network of markets, institutions, & financial instruments. Global Finance covers the five major areas of global finance including: the environment of global finance, international financial markets, international banking, international corporate finance, & international portfolio investment. This book operationally is heavily markets driven. This emphasis is seen in the up-to-date coverage given to market instruments in the global financial markets. In addition, financial management practice in banking, corporate finance, & investment management is all driven by current markets practice. Features * Student case book shrinkwrapped with every copy of the book. * Greater emphasis on the interconnection between banks & corporations, between portfolio managers & corporations, & more for flexible use. * Provides a markets orientation, exhibiting interconnections between different kinds of players & the markets, & reflecting the importance of the market place in valuing securities issued by corporations & by banks of various types. * Focuses on global finance as an entity differentiating itself from other texts in finance & international business. Supplements Instructor's Resource Manual, Transparency Masters, Computerized Test Gen for Windows & Macintosh. Table of Contents PART I: ENVIRONMENT OF GLOBAL FINANCE Chapter 1: Global Finance & the World Economic Environment Chapter 2: International Monetary System Chapter 3: Balance of Payments Analysis PART II: INTERNATIONAL FINANCIAL MARKETS Chapter 4: Foreign Exchange Market Chapter 5: Currency Futures, Options, & Swaps Chapter 6: Eurocurrency Market & Offshore Banking Chapter 7: International Bond Market Chapter 8: Major Financial Centers: New York, London, & Tokyo PART III: INTERNATIONAL BANKING Chapter 9: Global Banking: Overview Chapter 10: Financing Foreign Trade Chapter 11: Bank Money Management Chapter 12: Bank Lending, Euroloans, & Country Risk Analysis PART IV: INTERNATIONAL CORPORATE FINANCE Chapter 13: Direct Investment: Empirical Perspective, Motivations, & Risk Dimensions Chapter 14: Foreign Affiliate Financing, Taxation, & Cost of Capital Chapter 15: International Cash Management Chapter 16: Foreign Currency Exposure & Management Chapter 17: International Capital Budgeting PART V: INTERNATIONAL PORTFOLIO MANAGEMENT Chapter 18: International Investment & Capital Markets Chapter 19: International Portfolio Diversification Chapter 20: Investment Management & Evaluation
Harvard Law School scholars Laurence Tribe and Joshua Matz reveal how Chief Justice John Roberts is shaking the foundation of our nation’s laws in Uncertain Justice: The Roberts Court and the Constitution. From Citizens United to its momentous rulings regarding Obamacare and gay marriage, the Supreme Court under Chief Justice John Roberts has profoundly affected American life. Yet the court remains a mysterious institution, and the motivations of the nine men and women who serve for life are often obscure. Now, in Uncertain Justice, Laurence Tribe and Joshua Matz show the surprising extent to which the Roberts Court is revising the meaning of our Constitution. Political gridlock, cultural change, and technological progress mean that the court’s decisions on key topics—including free speech, privacy, voting rights, and presidential power—could be uniquely durable. Acutely aware of their opportunity, the justices are rewriting critical aspects of constitutional law and redrawing the ground rules of American government. Tribe—one of the country’s leading constitutional lawyers—and Matz dig deeply into the court’s rulings, stepping beyond tired debates over judicial “activism” to draw out hidden meanings and silent battles. The undercurrents they reveal suggest a strikingly different vision for the future of our country, one that is sure to be hotly debated. Filled with original insights and compelling human stories, Uncertain Justice illuminates the most colorful story of all—how the Supreme Court and the Constitution frame the way we live. “Marvelous...Tribe and Matz’s insights are illuminating.... [They] offer well-crafted overviews of key cases decided by the Roberts Court ... [and] chart the Supreme Court’s conservative path, clarifying complex cases in accessible terms.”—The Chicago Tribune “Well-written and highly readable...The strength of the book is its painstaking explanation of all sides of the critical cases, giving full voice and weight to conservative and liberal views alike.”—The Washington Post
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