Two years ago, I left for a sabbatical at Harvard Business School. During my time at HBS, I spent many Friday afternoons at the famous Harvard economic history seminar. You can click here to read a recent article about the prospects for economic history at Harvard (hat tip - Ryan Kee). Economic and business history is also thriving at HBS - click here to learn more. Business history has significant place in the curriculum at HBS, with MBA students taking courses in business history and the history of capitalism. It is my firm belief that students in business schools need to have a better grounding in history if they are to understand capitalism.
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...