A recent graduate “upcycled” his gown into personal protective equipment for healthcare workers (and inspired others to do the same), researchers found an antibody from a 2003 SARS patient that could be effective against the new coronavirus, and a team of MIT economists crunched the historical numbers and came up with some encouraging results on vaccine development. Read on for more promising news in the fight against COVID-19.
The finance faculty from the MIT Sloan School of Management have today sent an open letter to Congress supporting a stimulus package that focuses on combating the coronoavirus pandemic directly, as well as helping economically vulnerable households and small businesses. The MIT professors also said that unrestricted cash injection into large corporations would be a “grave mistake”.
“Bailouts of large firms mainly benefit large investors who are not as economically vulnerable and should understand the risks of investing in stocks and other corporate securities in the first place,” the letter states. “The fact that the 2017 corporate tax cut has led to a dramatic increase in share buybacks suggests that any similar cash injection into large corporations would mostly benefit large investors. In addition, large firms are much stronger financially.
The financial system has gotten much more complex, but many financial regulations are from the 1930's and 40's, notes Andrew Lo, professor at the MIT Sloan School of Management. Lo helped come up with the idea for the U.S. Office of Financial Regulation, which was created by the 2010 Dodd Frank Act. Nonetheless, much of Dodd Frank is way too long and difficult for anyone to understand, Lo contends. 'That wasn't so much an update as it was a piling on of new regulations,' Lo says of Dodd Frank.
The news of Osama bin Laden's death resulted in a boost for the financial markets. Andrew Lo offered one way to interpret this boost, and cautioned that "Financial markets will likely react positively to this news in the short run, but the repercussions may be more complex over time as we learn how bin Laden's death affects his organization and, consequently, the political economy of the Middle East."
...years, calling for additional cuts across the board. "If they make serious cuts over time, that's actually going to be quite good for the economy," said Andrew Lo, professor of Finance at the MIT Sloan School of Management. "It's bitter medicine, but we've got to take it."