Globalization

From the publisher: From the "guru to Wall Street's gurus" comes the fundamental techniques of value investing and their applications. Bruce Greenwald is one of the leading authorities on value investing. Some of the savviest people on Wall Street have taken his Columbia Business School course on the subject. Now this dynamic and popular teacher, with some colleagues, reveals the fundamental principles of value investing, the one investment technique that has proven itself consistently over time.

In a dynamic model of moral hazard, competition can undermine prudent bank behavior. While capital-requirement regulation can induce prudent behavior, the policy yields Pareto-inefficient outcomes. Capital requirements reduce gambling incentives by putting bank equity at risk. However, they also have a perverse effect of harming banks' franchise values, thus encouraging gambling. Pareto-efficient outcomes can be achieved by adding deposit-rate controls as a regulatory instrument, since they facilitate prudent investment by increasing franchise values.

At the turn of the century, the author examined changes in thinking about effective strategies for development.

This chapter attempts to describe changes in economic theory over the last 50 years - both in the kinds of models used and in the factors that are identified as playing the key roles.

This century has been marked by two great economic experiments. The outcome of the first set, the socialist experiment that began, in its more extreme form, in the Soviet Union in 1917, is now clear. The second experiment is the movement back from a socialist economy to a market economy. Ten years after the beginning of the transition in Eastern Europe and the Former Soviet Union: How do we assess what has happened? What are the lessons to be learned?

In the immediate aftermath of the onset of the global financial crises, attention was focused on the weaknesses in the borrowing countries; the suggestion was that, by pursuing unsound policies and indulging in "crony capitalism" these countries had brought the ills upon themselves.

The author explains why he thinks the Global Development Network is so important and why it is that the World Bank has taken such an active role in acting as a catalytic agent in promoting it, and develops some of the underlying epistemology that lies behind the creation of this new institution.