Click here to read about the creation of a new currency
in Bristol - the Bristol Pound (hat tip to Chris Colvin, an old Bristolian) Unlike past attempts to create a local
currency, the creators of the Bristol currency have taken care of the last
period problem associated with fiat money.
How have they done this? Well, in
true Thompsonian fashion, the local government accepts the new currency as
payment for local taxes (rates)! This
ensures that it has value in the last period, and therefore encourages traders
and shoppers in Bristol to use it.
Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton have written a paper on whether firms connected to Timothy Geithner benefited from these connections. They do so by looking at how stocks of these firms reacted to the announcement that he was a nominee for Treasury Secretary in November 2008. They find that there were large abnormal returns for connected firms. Below is the paper's abstract and the full paper is available here . The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small ne...