economics

Carbon Pricing

What is the best way to address climate change? If too much carbon is released in the air, how can emissions be reduced? By regulating corporations or by imposing costs on consumers in the form of a carbon tax? Moreover, even if a solution is found, not all nations, and not all people within nations, will agree on how to tackle the problem. In the words of Professor Barry Rabe, author of Can We Price Carbon? “Compelling ideas from economics do not necessarily suspend the laws of politics.” On May 4, 2023, Jessica Green, professor of political science at University […]

Heated Exchange

Climate-related natural disasters are increasing in frequency and severity and costs. Since climate change is not equal across countries, how does a country’s exchange rate respond to such shocks? Furthermore, is it possible to build an economic model to predict future changes? On April 6, 2023, Galina Hale, professor of economics at the University of California at Santa Cruz, delivered a webinar about the effect of climate change on exchange rates. This was part of the series of talks sponsored by the Federal Reserve Bank of San Francisco (FRBSF), titled the Virtual Seminar on Climate Economics. She reported results from […]

Green Stocks vs. Brown

Comparing the stock prices of climate-friendly (“green”) companies versus non-climate-friendly (“brown”) companies, which type will give better performance? Has this prediction been changing over the past decade—and why? And what are the recent pressures? On March 23, 2023, Michael Bauer, professor of economics at the University of Hamburg, delivered a  webinar on green vs. brown stocks as part of the series of talks sponsored by the Federal Reserve Bank of San Francisco (FRBSF), titled the Virtual Seminar on Climate Economics. He reported results from a recent paper co-authored with three other economists appearing in the Journal of Climate Finance. Bauer […]

The Forest Awakens

The Amazon rainforest is an iconic world ecosystem often referred to as “the lungs of the planet.” Yet it is being destroyed day by day. What systems are in place to monitor loss of valuable ecosystems? How effective are these systems? In 2019, the United Nations announced the “UN Decade on Ecosystem Restoration.” This international body estimates that restoration of 350 million hectares of degraded land between now and 2030 could generate USD 9 trillion in ecosystem services and take an additional 13-26 gigatons of greenhouse gases out of the atmosphere, gases that are warming the planet. On March 9, […]

Ask the Fed

“The Fed is trying to achieve price stability and maximum employment,” said Sylvain Leduc, Executive Vice President and Director of Research of the U.S. Federal Reserve Bank of San Francisco (FRBSF), known informally as “the Fed.” In terms of employment levels, “we are back to where we were pre-pandemic.” He was speaking on February 7, 2023, at a public briefing in which he outlined the FRBSF’s thinking on economic matters. He showed a graph of unemployment, which reached a peak at the start of the pandemic in early 2020. The monthly change in nonfarm payroll employment had a downward arc. “Job […]

E-Growth in Emerging Markets

What is happening in emerging markets? Are there areas where an informed investor can make a profit? What are the pitfalls to avoid? On November 22, 2022, the CFA Society of Toronto hosted a virtual webinar, “Rethinking Emerging Markets: The Case for Growth & How to Capture It.” The speaker was Kevin T. Carter, the founder and Chief Investment Officer of EMQQ Global. Carter began by providing his background. “I pray toward Omaha,” he quipped, because he considers himself an active “value” investor first and foremost, along the lines of “the oracle of Omaha,” Warren Buffett. Carter has collaborated with […]

Inflation & Wage Growth

As the U.S. economy emerges from the pandemic, inflation has been climbing. What effect has this had on average wages? Will it be a long-lasting effect? Recent research by leading economists at the Federal Reserve Bank of San Francisco (FRBSF) dives into these questions. “Our findings show that, since the pandemic, inflation expectations have been playing a more prominent role in wage-setting dynamics than in the past,” say the four authors of a paper released on September 6, 2022. Òscar Jordà is a senior policy advisor, Fernanda Nechio is a vice president, and Celeste Liu and Fabián Rivera-Reyes are both […]

The Beveridge Curve

In early 2021, in the wake of the Covid-19 pandemic, the U.S. saw many workers leave their jobs and seek other employment—leading to record high job vacancies—a phenomenon observed dubbed “the great resignation.” Lately, inflation is rising, markets are cooling, and the great resignation appears to be slowing. The question becomes: How will unemployment rise as growth slows and job vacancies decline? On August 29, 2022, the Federal Reserve Bank of San Francisco (FRBSF) released an Economic Letter titled “Finding a Soft Landing along the Beveridge Curve” that explores the current relationship between unemployment and economic growth. The paper was […]

Carbon, Cargo, Covid

As we slide into summer 2022, what are the big factors affecting the markets? Carbon, cargo, Covid. Governments and companies are starting to address the excessive carbon dioxide that is causing climate change. Interruptions of the supply chain, heavily dependent on cargo ships, continue to worsen operational risk. Meanwhile, the global economy is still dealing with the Covid-19 pandemic. On May 2, 2022, Derek Walter, head of the Institutional Asset Management Committee at the CFA Society Toronto, moderated two panelists during a webinar to discuss the underlying drivers of market changes. “We need to separate the short-term from the long-term […]

But What About Inflation?

Now that the worst of the Covid pandemic appears to be over for North America, inflation has kicked in and investors everywhere are on guard. Is the inflationary trend here for the long term? What, really, lies at the root of this particular instance of inflation? Moreover, what is the best hedge against inflation? On April 4, 2022, James Montier, a member of the Asset Allocation Committee of the CFA Society of Toronto, gave a one-hour webinar on “Hedging Inflationary Risk.” He is the author of three market-leading books: Behavioral Finance: Insights into Irrational Minds and Markets, Behavioral Investing: A […]