Finance: Past, Present and Future

In a recent paper in the Quarterly Journal of Economics , Filipe Campante and David Yanagizawa-Drott look at the affect of religion on economic growth and happiness. They look at observance of Ramadan fasting and exploit variation in the length of daily fasting due to the interaction of the Islamic calendar and a country's latitude. They find that longer Ramadan fasting has a negative effect on output growth in Muslim countries, but that longer Ramadan fasting increases subjective well-being. In other words, some religious practices may make the individual feel better, but may be bad for the overall economy.  For me, this paper raises several interesting questions for economists. First, do all religious practices have this effect? For example, Sabbath or Holy day observance. Second, can religion positively affect both economic growth and happiness? Third, might there be differences amongst religions - with some having no effect, others negative-positive, others negative-neg...

There has been much debate recently about the contents of undergraduate economics degrees - see, for example, the coreecon project. Below is an FT video on teaching real-world economics to undergraduates.

Along with Graeme Acheson and Christopher Coyle, I've recently written a paper entitled "Happy Hour Followed by Hangover: Financing the UK Brewery Industry, 1880-1913". The QUCEH working paper version is available here . The paper examines the 'brewery bubble' which occurred in the UK in the late 1890s and early 1900s. This episode provides us with interesting insights for modern-day financial markets because many of the breweries issued debt finance to fund their purchase of their pub chains. This debt financing by the breweries resulted in a tripling and quadrupling of the prices of pubs. However, the pub bubble burst, resulting in the ruination of many breweries and huge losses for investors. Here is the paper's abstract: In the last 15 years of the nineteenth century c.300 British brewers incorporated and floated securities on the stock market. Subsequently, in the 1900s, the industry suffered a long-lived hangover. In this paper, we establish the sty...

The recent Bank of England Quarterly Bulletin has a really nice article on the City of Glasgow Bank crash which occurred in October 1878 - click here for the article and see below for an interview with one of the the authors. This article draws very heavily on my 2008 paper on the City of Glasgow Bank crash and my book Banking in Crisis . The authors do a great job of outlining seven lessons from the crash for modern-day policymakers.