Has the finance industry become less efficient? Or Where is Wal-Mart when we need it?
Thomas Philippon 02 December 2011
Has the financial industry become less efficient? This lead commentary in the Vox debate on the financial sector argues that, despite all of its fast computers and credit derivatives, the current financial system is no better at transferring funds from savers to borrowers than the financial system of 1910.
The role of the finance industry is to produce, trade, and settle financial contracts that can be used to pool funds, share risks, transfer resources, produce information, and provide incentives. Financial intermediaries are compensated for providing these services.
International finance Productivity and Innovation
financial sector, efficiency, Wal-Mart
The two faces of Wal-Mart in Mexico
Leonardo Iacovone, Beata Javorcik, Wolfgang Keller, James R Tybout 20 August 2011
The entry of Wal-Mart into Mexico 20 years ago has reshaped the country’s industrial structure. This column argues that the effect has been polarising. While Wal-Mart’s retailing power has helped more productive companies expand their market shares and boost productivity, the retailer’s pressure to lower prices and innovate has pushed down mark-ups and marginalised less capable producers.
Wal-Mart is a company that polarises. While there is much to be said about the low prices and extensive selection Wal-Mart offers its customers, its business model can be controversial (LA Times 2011). The US Supreme court has just heard a major sex discrimination lawsuit against the firm, and Wal-Mart is frequently in the news for its anti-union policies, its use of “sweatshop” suppliers abroad, and its impact on smaller retailers. Such controversies are not limited to the United States.
Global economy International trade
globalisation, Mexico, Wal-Mart, deregulation