The Institute for Fiscal Studies released an interesting study today looking at wages, employment and productivity in the UK. The economic downturn in the UK since the financial crisis has been marked by relatively low unemployment figures compared to past recessions as well as a fall in productivity. The explanation seems to be that in this recession wages have fallen quite substantially in nominal and real terms. According to a TUC study, in some parts of the UK, average real wages have fallen by 10% since 2007. According to the IFS, the average private-sector worker earned £15.10 per hour in real terms in 2009, and this had fallen to £13.60 in 2011. The IFS study is available here and the BBC's coverage is here.
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...