Finance: Past, Present and Future

Marginal Revolution University has a neat video on the Fed as a lender of last resort.

In the video below, the folks from Marginal Revolution University take a look at Christmas from an economics perspective. The deadweight loss of Christmas was the title of a paper back in 1993 by Joel Waldfogel .

This week Michael Aldous , Laurence Mussio and I launched the Long Run Initiative (LRI). We have set up the LRI as a forum for academic experts, business leaders and public policymakers. It provides insights from the analysis of long-run experiences and trends to provide context and deepen understanding of the grand challenges facing businesses and government. LRI analysis focuses on where we have been, where we are now, and where we are going. LRI is an initiative of the Queen's University Centre for Economic History .  You can read more about LRI at our website  and follow our blog . You can also follow us on Twitter @longinitiative .  

I'm interested in who invested in companies in the past. I've recently published a paper which looks at clientele effects in Victorian companies - who invested in what type of company and why. In a recent Queen's University Centre for Economic History working paper , I and three colleagues ask the question whether women shareholders in the age of the suffragettes were really making independent investment decisions. Using details on circa 500,000 railway shareholders, we produce the startling finding that women typically invested as solo investors whereas men typically invested together with other men. This implies that women were independent in the sense that they did not co-own shares along with men. Why did men typically co-own shares? We find evidence that men may have co-owned shares as a means of diversifying and a means of investing in non-local companies. Another interesting finding is that the shareholder lists placed an asterisk beside shareholders who owned en...

I have post over at the Economic History Society's blog - The Long Run - on the liquidity of the London capital Market before 1870. You can read the post here and the underlying paper is here .

As well as being the 10th anniversary of the failure of Lehman Brothers, today is the 4th anniversary of the official launch of my book Banking in Crisis: The Rise and Fall of British Banking Stability, 1800 to the Present . Prior to 2008, I had almost given up writing about the history of banking stability - people weren't interested. Banking crises were merely of historical curiosity and therefore perceived to be irrelevant. 2008 changed that. All of a sudden, people wanted to know about past crises and historical banking stability. I was asked to speak to bankers and academics and out of these talks Banking in Crisis was conceived. If you are unfamiliar with Banking in Crisis , here is the blurb from the back of the book:  Can the lessons of the past help us to prevent another banking collapse in the future? This is the first book to tell the story of the rise and fall of British banking stability in the past two centuries, and it sheds new light on why banking systems...

There are six standout public events in my memory - I can still picture where I was when I heard the news and who told me the news. The events are the resignation of Margaret Thatcher as PM, the death of Princess Diana, the Omagh bomb, the tragic events of 9-11, the collapse of Lehman Brothers on 15 September 2008, and the results of the Brexit referendum. The collapse of Lehman Brothers a decade ago was the news that really brought home to ordinary people the scale of the financial crisis that was enveloping the world economy. Why was Lehman Brothers pushed into bankruptcy whereas AIG was rescued a day later? Prior to Lehman's difficulties, the Fed had rescued Bear Sterns in March 2008 and the U.S. Treasury had placed Fannie Mae and Freddie Mac into conservatorship and had injected substantial funds into both institutions. The standard narrative is that the U.S. government and the Fed refused to bail it out because it was illegal to do so. They also did not believe that i...

It's coming home. Football that is. Tonight England face Croatia for a place in the World Cup Final. If England lose tonight what will happen the stock market tomorrow? A paper by Alex Edmans and co-authors find that markets decline after football losses. For example, they find that a loss in the World Cup elimination stage leads to a next-day abnormal stock return of -49 basis points. Why? The idea is simple. Stock prices are driven by things like mood and sentiment. A loss by a national football team has a negative impact on national mood and affects the trades made by investors the next day. England lost on penalties to Germany on 4th July 1990. The FT30 index fell by 1.2% on 5th July. I feel a new World Cup song coming on - 'Football hurts your portfolio'!   

Along with Sean Kenny (Lund), I've written a working paper looking at the stability of Irish banking from 1797 to 1826. The paper is entitled "Wildcat Bankers or Political Failure? The Irish Financial Pantomime, 1797-1826". You can access the paper here at the Queen's University Centre for Economic History website.  Abstract : Using a new biography of banks, we examine the stability of Irish banking from 1797 to 1826 by constructing a failure rate series. We find that the ultimate cause of the frequent and severe banking crises was the crisis-prone structure of the banking system, which was designed to benefit the political elite. There is little evidence to suggest that wildcat banking or the failure of the Bank of Ireland to act as a lender of last resort were to blame. We also find that the main economic effect of the episodic crises was major diminutions in the money supply.   

The first lesson of academic leadership is that it takes nearly 12 months to catch up on a large backlog of research. This is my reason (excuse) for not blogging since I stepped down as Head of Queen's Management School. When I stepped down, I indicated that I would write a series of posts which reflected on my time as Head. However, I underestimated the sheer effort it would take to kickstart the various research projects which I was involved with.    If you are thinking of taking on a leadership role in a university, it will have a substantial effect on your research productivity. I went into the role knowing this. The way I coped was to see my research as a hobby - something that helped me relax and that I tinkered at on Saturdays and in my spare time. I also went each summer to Cambridge MA to get the head space and peace to work on research. If you take on a leadership role in another type of organisation, you will be managing and leading a team. Your time will n...