Geoff Mulgan, 11 April 2014

Geoff Mulgan talks to Romesh Vaitilingam about his recent book, 'The Locust and the Bee: Predators and Creators in Capitalism's Future'. Mulgan suggests that the economic crisis was a dramatic reminder that capitalism can both produce and destroy, but that it also provides a historic opportunity to choose a radically different future for capitalism - one that maximizes its creative power yet minimizes its destructive force. They discuss the importance of social innovation and the creative economy. The interview was recorded in May 2013.

Bryan Kelly, Lubos Pastor, Pietro Veronesi, 31 March 2014

Despite obvious ties between political uncertainty and financial markets, the nature of this connection has not been studied in detail. This column describes a theoretical framework for evaluating the influence of political uncertainty on financial markets. Political uncertainty commands a risk premium, especially when the economy is weak. By raising firms’ cost of capital, it depresses investment and real activity. Furthermore, by raising risk premia, political uncertainty destroys market value.

Scott Baker, Nicholas Bloom, Steven Davis, John Van Reenen, 29 October 2012

The US recovery is painfully slow and monetary policy is at its limits. Pervasive economic uncertainty appears to be holding the US back. But what is the root cause of this uncertainty? This column argues that a polarised political system is to blame. Without a political mechanism that incentivises the election of moderate politicians, the authors predict further political divergence between Republicans and Democrats over the coming years and a consequent intensification of policy uncertainty.

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