Publication Year: within 3 Years and within 5 Years / Journal: The Cato Journal / Topic: Economy

Author:: Allan M. Malz
Publication Date:: 10-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The GameStop stock trading episode that began in January 2021 has been unprecedented in some ways, especially in the ability of market participants to organize collective action openly yet anonymously. In other ways, it’s been an unsurprising repetition of past experience. Financial markets are imperfect, they display many frictions, and the imperfect alignment of interests is a perpetual dilemma in designing both contracts and public policy.
Topic:: Regulation, Economy, Public Policy, and Stock Markets
Political Geography:: United States of America

Author:: Jennifer J. Schulp
Publication Date:: 10-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: In January 2021, a curious event in the stock market caught the attention of the media, regulators, and the public. A well‐known struggling company dominated the headlines, not for its business model, but for the meteoric rise of its stock price. GameStop Corp. started the year trading around $19.00 a share, a pretty robust share price for a company that had been trading below $5.00 as recently as August 2020. Yet, by the end of January, GameStop’s shares were trading at over $300, at one point hitting a high of $483. GameStop’s stock price has receded from those meteoric highs, but, as of late May, it continues to trade between $160 and $180 a share.
Topic:: Markets, Economy, Investment, Stock Markets, and Equity
Political Geography:: Global Focus

Author:: Jack Salmon
Publication Date:: 10-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Following the 2007–2008 global financial crisis (GFC) and subsequent sovereign debt crisis in Europe, there has been a renewed interest in exploring the relationship between government debt and economic growth. One of the cornerstone studies on the subject that triggered an emergence of new literature was Carmen Reinhart and Kenneth Rogoff’s “Growth in a Time of Debt” (2010), which became widely cited and influential among commentators, academics, and policymakers in the debate surrounding austerity and fiscal policy in debt‐burdened economies. Much of the research that followed the GFC uses panel data analysis of the debt‐growth nexus using datasets from the World Bank, International Monetary Fund (IMF), European Commission, and Organisation for Economic Co‐operation and Development (OECD).
Topic:: Economy, Economic Growth, Survey, and Public Debt
Political Geography:: Global Focus

Author:: Lawrence H. White
Publication Date:: 06-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Private commercial banks have been providing trusted money to the public for hundreds of years, in the form of banknotes (where allowed) and transferable deposit balances, as an integral part of their business model. Economically, money balances are a private good: they are rival in consumption (you and I can’t both simultaneously spend a given banknote or deposit balance) and excludable in supply (you and your bank can stop me from spending the funds in your wallet or account) (White 1999: 89). Accordingly, the market does not inherently fail to provide money efficiently.
Topic:: Markets, Monetary Policy, Economy, State, Banks, and Digital Currency
Political Geography:: Global Focus

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