Economics Insights @ CBS

Research has yielded weak empirical support for the idea that creative solutions may be discovered through unconscious thought, despite anecdotes to this effect. To understand this gap, we examined the effect of unconscious thought on two outcomes of a remote-association test (RAT): implicit accessibility and conscious reporting of answers.

The gap between the qualifications of New York City teachers in high-poverty schools and low-poverty schools has narrowed substantially since 2000. Most of this gap-narrowing resulted from changes in the characteristics of newly hired teachers, and largely has been driven by the virtual elimination of newly hired uncertified teachers coupled with an influx of teachers with strong academic backgrounds in the Teaching Fellows program and Teach for America.

Hedge fund activism is a new form of investment strategy. Using a large handcollected data set from 2001 to 2006 we find that activist hedge funds in the U.S. propose strategic, operational, and financial remedies and attain success or partial success in two-thirds of the cases. The abnormal stock return upon announcement of activism is approximately seven percent, with no reversal during the subsequent year. Target firms experience increases in payout, operating performance, and higher CEO turnover after activism.