Top of Mind

Saving energy is great. But how much is actually possible?

The Washington Post's Wonkblog looks at how efforts to increase energy efficiency can run into complex challenges in the real world. "One recent study of Mexico, for instance, found that a government program to help people to upgrade their refrigerators with energy-saving models really did curtail electricity use. However, a similar program for air conditioners had the opposite effect—when people got sleeker A/C units, they used them more often, and energy use went up." In a recent

Classroom Insights video, Yale Law Professor Douglas Kysar emphasized the importance of building institutions "commensurate with the scale of the problem" to fight climate change—rather than relying on individuals to make different choices.

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Rock and Roll, Economics, and Rebuilding the Middle Class

Alan Krueger, chairman of the council of economic advisers, used a speech at the Rock and Roll Hall of Fame to show how pervasive the "winner-take-all" economy has become—in both the music business and the broader society. He noted that "the share of concert revenue taken home by the top 1% of performers has more than doubled, rising from 26 percent in 1982 to 56% in 2003. The top 5% take home almost 90% of all concert revenues." Krueger went on to argue for an economy that grows from the middle out, not the top down.

More on the economic consequences of inequality: "Is economic inequality too big a risk?" with Yale's Robert Shiller and Jacob Hacker.

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Could one Walmart's low wages cost taxpayers $900,000 per year?

Responding to "One Walmart's Low Wages Could Cost Taxpayers $900,000 Per Year, House Dems Find" in the Huffington Post, Senior Associate Dean David Bach noted, "Walmart is rightfully held up in strategy classes as an example of 'cost leadership' but there is a question whether society pays a high price for Walmart's low prices in terms of externalities. Healthcare costs borne by the public are Exhibit A in this respect."

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Are U.S. investors missing out in Africa?

Are U.S. investors missing out in Africa? During a summit marking the 50th anniversary of the African Union, Secretary of State John Kerry urged U.S. businesses to invest in Africa. While acknowledging stability and security issues on the continent, he noted that Russia, Brazil, and China are increasingly important players in the growing economies there. More from NPR.

Donald Gips '89, former U.S. ambassador to South Africa, made a similar point in conversation with Yale Insights. "The risks are large," he said, "but the opportunities are huge and they need investment." Beyond the chance for significant returns, Gips said that engagement by U.S. investors in Africa can drive good business practices, transparency, and reduced corruption there.

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Why public companies should have public tax returns

Who should pay for government? In 1952, the corporate tax provided 32% of federal tax revenue; today the number is at 8.9%. The Senate Permanent Subcommittee on Investigations is currently looking at the tactics that Apple uses to minimize its tax bill. More from Felix Salmon of Reuters.

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What can the U.S. learn from retirement systems around the world?

The U.S. faces deep challenges in its retirement system, including projected shortfalls in Social Security and a $1 trillion dollar gap in public pension programs.

A recent article in the New York Times looked at how other countries’ retirement systems might provide tips for strengthening the U.S. system. However, the variation in retirement systems from country to country can also be seen as a reflection of cultural differences which make it hard to import ideas.

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Have consumer expectations of engagement with brands changed the ways companies view CMOs?

Have consumer expectations of engagement with brands changed the ways companies view CMOs? Ad Age reports that CMO tenure is 46 months, double what it was seven years ago.

Professor Ravi Dhar commented: "Changes in C-suite tenures is an important early indicator of the value and importance of marketing in overall business strategy."

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James Choi on Fed's response to rate rise

Responding to "Fed Zeroes In on Vulnerability to Rate Rise" in the Wall Street Journal, Professor James Choi noted: It seems intuitive that locking in a fixed stream of interest income (or payments) for a long time is a risk-reducing move, but this article shows that long-maturity fixed-rate debt actually exposes you to interest rate risk unless the other side of your balance sheet has a similarly long cash flow duration.

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James Choi on why earnings per share is a flawed metric

From Professor James Choi: For years, I have taught students that earnings per share is a highly flawed metric that is vulnerable to manipulation, and this article highlights one manifestation of its flaws. Responding to "As Companies Step Up Buybacks, Executives Benefit, Too" in the Wall Street Journal.

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The science of pleasure

Berkeley economist Daniel McFadden, who won the Nobel Prize for his work analyzing choice, proposes a new "science of pleasure" that will shed greater light on how consumers make decisions. In a working paper, he writes that our understanding of social networks as well as research from cognitive psychology, anthropology, evolutionary biology, and neurology should all play into our understanding of the economics of choice.

For more see:

Yale psychologist Paul Bloom on "Why do we like what we like?"

Our issue devoted to behavioral research.

An economist's take on happiness research.

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