Millennial Smackdown: Can They Live Paying Only Cash or Credit?
“Cash or credit?” is a phrase uttered by thousands every day. And most individuals happily interchange between the two choices. Plus, every day it seems there’s yet another announcement for a new way to pay: Starbucks and Square; Google Wallet; the Merchant Customer Exchange. Even MasterCard is no longer a “toll collector,” “merely a financial services company” or “an extension of the bank,” says MasterCard’s Jennifer Stalzer, but “a company that uses technology to help consumers have better control of their finances.”
As the concept of the financial transaction undergoes a radical transformation, MasterCard and [The Fletcher School at] Tufts University decided to conduct similar experiments with their summer interns and students, respectively. These Millennial-aged participants were separated into two groups — one team could only use cash, while another team could only use plastic — and documented their experiences using social media.
“People have spending habits that are deeply ingrained, but as we become more mobile and online, are Millennials the next generation that will think it’s normal to keep a wallet? Will they say, ‘I can’t believe we used to carry around metal cards with chips?’” says The Fletcher School at Tufts University’s Ben Mazzotta, who helped design the challenge.
While Tufts University’s contest directly inspired MasterCard’s experiment, the two set slightly different parameters. Tufts forbid ATM cash withdrawals, whereas MasterCard allowed ATM cash disbursements. The Tufts contest ran for one week, whereas MasterCard’s challenge lasted three months. Both, however, used social media engagement, including total views for blog posts and total number of retweets, to determine their winning teams.
Read the full Forbes.com article
Can automated share-trading threaten financial stability? Lesley Curwen discusses the recent rescue of Knight Capital and other glitches and 'flash crashes' with Adam Sussman, Director of Research at the TABB Group, Philip Coggan, the Buttonwood columnist of The Economist and Professor Amar Bhide from [The Fletcher School at] Tufts University in the US.
Mitt Romney is scheduled to attend the opening ceremonies of the London Olympics Friday night. The presumptive Republican presidential nominee is also visiting London to raise some cash.
Romney’s fundraising hosts include lobbyists and banking executives associated with the LIBOR rate-fixing scandal. That’s raised some criticism from British parliamentarians. But foreign fundraising trips have become an integral part of running for the American presidency.
During the 2000 presidential election, George W. Bush and Al Gore raised a combined $230,000 from Americans living abroad. Four years later, contributions from Americans overseas were again modest. Then, in 2007 presidential candidate Rudy Giuliani took a trip to London and tapped into a new pool of deep pockets. Other candidates quickly followed his lead.
Bhaskar Chakravorti, a senior associate dean at The Fletcher School at Tufts University, said fundraising has turned into a war of attrition.
“Every time one side raises a dollar, the other side feels compelled to raise $1.50. And international locations are a natural place to go because you have, I’d say about roughly 4 to 5 million Americans, many of them professionals. Many of them who would like to feel connected to what’s going on in the United States. And you can bring them in.”
Listen to the full PRI's The World story
June 4, 2012
Dean Chakravorti on Strategy for Managing Investments in BRIC Countries
When the BRICs Crumble
Eight strategies for managing investments in the much-hyped, now-teetering big emerging markets.
When Goldman Sachs economist Jim O’Neill came up with the BRICs concept in 2001, it served as shorthand for a group of economies that deserved special attention even if they weren’t quite ready to join South Korea and Mexico as new entrants to the OECD group of developed economies.
But in one important sense, it represented pure concoction: Except that they were big and interesting, these countries had almost nothing whatsoever in common.
Yet the fortuitous acronym had legs. It called attention to places that deserved to be watched. And it caught the imagination of international investors.
So if you run a global company that has carefully built a BRIC strategy, what do you do now? We polled the experts.
Begin to think more holistically
CEOs must begin to stand up for sensible public policy, labor reform and protection of human rights in emerging markets, according to Bhaskar Chakravorti, senior associate dean of International Business and Finance at The Fletcher School at Tufts University.
If companies continue to rely on the BRICs to fuel growth, he warns, they are setting up the equivalent of what he views as a global pyramid scheme that is bound to ultimately collapse. While the economics of the emerging markets are attractive, he says, people often forget that there is more than just a “market” in the emerging market; there is a surrounding context. In his view, what is unusual about this new global order is that the “contextual factors” that dictate how the emerging markets perform have not kept up with their growth rates.
Read the full GlobalPost article
May 8, 2012
In Praise of the Beleaguered Euro: Op-Ed by Professor Amar Bhide
Sunday's trouncing of Greece's ruling coalition in parliamentary elections is fanning fears that it will leave the euro zone and try to devalue its way out of crisis.
Some believe this to be the right course of action. They argue that Greece and other countries on the continent's southern periphery should never have joined the euro. Tough global competition depresses prices, while rigid labor markets prop up wages. A lower exchange rate would ease the squeeze, but the competitiveness of exporters in Germany and other northern countries keeps the euro high.
The argument for fleeing the euro to devalue is misguided. Greece and the other peripheral economies lost little in giving up their national currencies. Nor did their membership make the euro zone too sprawling to succeed. If anything, its size and heterogeneity are a plus.
Currency devaluations supposedly give countries with chronically uncompetitive businesses and rigid labor markets a way out. Devaluation is tantamount to a price cut that allows local companies to maintain or even expand their share of international markets. Devaluation, the argument goes, also raises the price of imports, giving local businesses an edge in their home market.
Read the full Op-Ed in The Wall Street Journal
April 4, 2012
An Integrated Approach to Addressing Current Resource Crises
|From left: Bhaskar Chakravorti, Richard Vogel, Peter Walker and Kelly Sims Gallagher. (Matthew Modoono for Tufts University)
Alumni, current students, and professors from the Tuftscommunity descended on The Ritz-Carleton in Boston on Wednesday, April 4 for a networking and informational event entitled Resource Crises: Food, Fuel, and Water Scarcity – The Coming Conflict and Implications for Multinational Business and Finance. Sponsored by Tufts Financial Network and The Fletcher School’s Institute for Business in the Global Context (IBGC), the event was the last of a three-part series meant to address current global crises, their impacts, and the opportunities they present for learning and change.
Dean Bhaskar Chakravorti, head of the IBGC and its newest creation, Fletcher’s Master in International Business program, moderated a panel which included three well-known Tufts minds: Kelly Sims Gallagher, associate professor of energy and environmental policy at Fletcher; Richard Vogel, professor of civil and environmental engineering at Tufts and director of the graduate program in Water: Systems, Science, and Society; and Peter Walker, the Irwin H. Rosenberg Professor of Nutrition and Human Security at The Friedman School and director of Tufts’ Feinstein International Center.
Read the complete event summary here.
March 7, 2012
Dean Bhaskar Chakravorti Poses the Question: Is Capitalism in Crisis?
|From left: Eileen Aptman, Shumeet Banjeri, Amar Bhide, Michael W. Klein, Bhaskar Chakravorti
Is capitalism in crisis? – this provocative question posed by Bhaskar Chakravorti, Senior Associate Dean of The Fletcher School hung in the air of the Grand Hyatt New York as attendees at the Tufts Financial Network event on March 7, 2012 sat, eager for the panelists’ response. Panelists Michael W. Klein, Amar Bhide, Shumeet Banjeri, and Eileen Aptman responded each in their turn with an unwavering no, agreeing the popularity of this question arose more from its alliteration than from its relevance. Capitalism, they insisted, is well and thriving. However, the response was nuanced with the observation that the United States is suffering from internal inefficiency, causing the country’s recovery and long term outlook to sputter.
Bhide, the Thomas Schmidheiny Professor of International Business at The Fletcher School, responded that the real economy (Main Street) functions like a true market economy, including a free-flow of capital efficiently allocated by decentralized decision makers. The financial system, on the other hand, runs through centralized decision makers such as credit agencies, resulting in a skewed misallocation of capital that could lead us to our financial doom – as evidenced by the financial crisis. The panelists were, again, unanimous in their agreement but reiterated that the principals of capitalism remain strong despite the apparent brawn of centrally planned economies like China.
Read the complete event summary here.
Tufts Financial Network Interview
with John Greenwood, F'04 and Director of infrastructure and energy finance at Citigroup
Fletcher School student Varun Hallikeri, F'12, spoke to John about his education at Tufts, career growth at Citi, infrastructure opportunities in Latin America, and advice for young graduates in the light of the global financial crisis.
You have had a career in finance for close to 12 years now. Looking back, how has your education at The Fletcher School helped you in your growth in the financial sector?
John Greenwood (JG): After my undergraduate studies, I joined Merrill Lynch (ML) in their Junior Executive Training (JET) program where I worked for two years across different functional teams. When I finished the program, ML had entered into a joint venture with HSBC Bank to create an online trading platform and I moved to London and then to Paris to develop this business.
In 2002, when I decided to pursue my master's, I wanted to do something different from a traditional M.B.A. to differentiate myself from a general finance professional in the realm of the emerging markets. I chose the master's program at The Fletcher School as it had depth in both finance and macroeconomic issues. With prior on-the-job training in mainstream Wall Street finance for four years, I looked at this education effectively as a specialization in finance where I could further pursue my interests in economic development and emerging market finance. In hindsight, I believe that this transition was very fluid, thanks to my Fletcher education and the exposure I got at Tufts. I delved into international finance topics, including currency convertibility, international events such as crises in Latin America and Asia, and similar issues. All this gave me a diverse and rich perspective on doing business in an international context, which has stood me in good stead over the last eight years.
Read the complete interview here.