More News from IWER

By the time companies are discussing bailouts, "they're already toast, and you're just trying to resurrect them from the dead," said professor Deborah Lucas. Bailouts can have a bad reputation, she said, but there are some cases where there is some justification. That's why, Lucas added, there was a lot of support for bailing out the banks in response to the 2008 financial crisis.

Senior lecturer Robert Pozen wrote: "Private credit has opened new borrowing channels to companies that otherwise struggle to access capital markets. But now that private-credit and secondary funds have sold shares to millions of retail investors, the pricing of loan transactions should be more transparent."

AI's "potential for job destruction is very significant, and those who hold capital will get richer," said professor Simon Johnson. For him, what's needed is "worker-friendly AI," a technology that enhances human capabilities, accelerates the acquisition of expertise, and creates new tasks, instead of rendering human skills obsolete.

Professor Thomas Malone and co-authors have developed a new way of analyzing work, to help predict which jobs are most vulnerable to AI disruption. "Instead of focusing primarily on jobs," said Malone, "we focus on the detailed activities that people and machines do at work." AI mainly threatens workers who manage information. But not all of them. Malone noted that some industries demand human empathy, a sense of ethics, and a knack for teamwork.

"The rhetoric out there is that the tools are going to be democratizing. But the reality is that you require a certain degree of education, abstract and quantitative skills, familiarity with computers and coding in order to be using the models," said Institute Professor Daron Acemoglu. "AI is going to increase inequality between labour and capital."

Research, by assistant professor Mert Demirer, associate professor John Horton, Peyman Shahidi (PhD candidate), and co-authors models production as a sequence of interdependent steps and shows that it is this interdependence that determines the true extent of the gains enabled by AI. "We are seeking to understand the effect of AI at the overall system level, not as a one-off productivity tool applied on a task-by-task basis," said Shahidi.

Senior lecturer Sharmila Chatterjee emphasized that retailers must combine operational efficiency with customer-centric innovation. "The future of retail is a hybrid of online and offline channels. To keep customers coming back, retailers need to make strategic investments, experiment with new approaches, and, inevitably, engage in some trial and error as they figure it out," she said.

Professor Simon Johnson and co-author wrote: "If the administration truly believes sweeping tariffs are an appropriate response to the trade deficit, it should make that case to Congress and to the American people. The courts should not let the administration rely on a clear misinterpretation of an outdated statute, just as they did not let the administration rely on an overly expansive reading of an emergency statute."

Keeping California's only nuclear power plant running could save the state billions of dollars. That's the conclusion of a new research commentary by senior lecturer John Parsons. Extending the Diablo Canyon Power Plant's state permission to operate from its current 2030 cap to the 2045 timeline that federal regulators recently approved could save California ratepayers $7.6 billion to $20 billion, wrote Parsons.

If concentration is structural, what happens when you try to fight it? Senior lecturer Mark Kritzman and co-author set out to answer that in a recent paper. They built a dynamic strategy that reduced equity exposure whenever market concentration was historically high and increased it when concentration fell. The result: lower returns, higher risk and less than half the cumulative wealth of staying invested.