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April 30, 2013

Contents of our research journals are like unfiltered water. Decision and policy makers should stand forewarned before they use the contents of academic journals to guide them in their work. Fortunately, most of them maintain a healthy skeptical attitude to our findings and prescriptions until they have more evidence on their efficacy.

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March 28, 2013

A friend from Cyprus writes:

Indeed the situation here is not good. We have major financial problems. Greece took us down the drain. Our banks lost about 4.5 billion euros from the haircut on Greek government bonds, 5 billion in non-performing loans from Greek operations of Cypriot banks, plus about 3 billion from a major blast at the energy base in Cyprus (in July 2011). Since our GDP is only 18 billion euros, these losses add up to about the 70 percent of our GDP. But we have no choice. We have to see ahead and do our best and recover asap.

Shyam Sunder

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May 24, 2010

Congratulations to Dr. J. Craig Venter and Synthetic Genomics, Inc. for their breakthrough in modifying an existing cell with some synthesized genes. The news reports say that they have applied for a patent on their invention (Read the article in the New York Times). The social goal of our system of patents is to reward innovation in the hope of improving our society.

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April 19, 2010

Derivatives in corn fields are nothing new. Futures contracts in agricultural commodities helped farmers protect themselves from variations in market prices. In March 2010, I visited Iowa State University to speak at the 25th Anniversary celebration of its management school. A faculty friend at the university told me this story. She was a shareholder of a biodiesel firm. It had reported a one million dollar loss on its derivative positions. She was unhappy and attended the shareholders’ meeting to ask how the firm incurred the loss.

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March 8, 2010

I attended a Yale School of Management research workshop by a visiting professor this week. Through a carefully designed experiment, the authors of the paper had found that people make systematic errors in deciding which products they want, depending on how the information is presented to them. Such errors can be exploited by companies who can design their advertisements and other messages using the knowledge of the pattern of errors.

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February 9, 2010

“All the serious money is indexed,” Burton G. Malkiel, Princeton economics professor and former dean of Yale SOM, is quoted to have said in Paul Sullivan’s February 6, 2010, article in the New York Times. Malkiel’s new book, The Elements of Investing, authored with Charles D.

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February 4, 2010

Given the recent change in policy in Washington with the so called “Volcker Rule,” and the renewed attention to the problems caused by financial firms that are “too big to fail,” I thought it might be appropriate to present some of my own suggestions here on the Yale SOM Community Blog. The following essay was originally written in September 2008.

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