More Defence Spending Is Good for the Economy
A new EU‑wide analysis of defence contracts from 2009‑2023 finds that a 1 % of GDP increase in defence spending generates a cumulative 2 % boost in GDP over the next five years. The study links the spending surge to higher capital formation, more jobs, and improved worker productivity. Domestic procurement magnifies the effect, while buying foreign weapons dampens it. The findings arrive as the UK and Germany plan modest defence‑budget hikes through 2028, reigniting the classic guns‑vs‑butter debate.
Repeat After Me: Higher Minimum Wages Are Good for Business
Economists have long argued that higher minimum wages do not automatically cut jobs, and a new study by Nirupama Rao and Max Risch confirms this for the most vulnerable firms—small independent businesses. Using state‑level wage changes as a natural experiment,...
The Name Is Spy, Corporate Spy
A new Harvard‑Berkeley paper quantifies the damage of corporate espionage, finding that firms successfully targeted lose about 40% of revenue and see a comparable 40% reduction in R&D spending within five years. The study also shows a 60% decline in...
Labour Shortages Are Coming. What Are Businesses Going to Do?
Labour shortages are set to deepen as Europe’s working‑age population ages and immigration rules tighten. In the UK, the Office for Budget Responsibility projects trend growth slipping from 1.8% in 2025 to 1.3% in 2026, driven largely by a drop...
AI Can’t Even Forecast Inflation
A Federal Reserve research team compared ChatGPT’s inflation forecasts to the Cleveland Fed’s nowcast model and found the AI’s errors dramatically larger—up to twelve times higher during ambiguous periods and seven times higher in a true out‑of‑sample test. The study...
Are Stocks a Good Inflation Hedge?
The author argues that stocks are not a reliable hedge against inflation, citing research that shows negative or low inflation betas for U.S. equities. A study by Fang, Liu, and Roussanov (2026) measured excess‑return betas to headline, core and energy...
The Real Reason Why some Companies Are Moving to the US
A UK‑listed firm decided to move its shares to New York after a shareholder shared a study linking weather to earnings‑call tone. The research found that grey, cold days in the UK make CEOs and CFOs sound more subdued, cut quantitative...
Unpredictability Creates Alpha: Stock Picking
A new NBER working paper by Lauren Cohen et al. uses machine‑learning to forecast the quarterly holdings of U.S. equity funds from 1990‑2023, correctly predicting 71% of fund trades. The study finds that stocks easily identified by a fund’s style—value,...
Is Nonlinear Momentum the Answer?
Researchers led by Tobias Moskowitz introduced a nonlinear momentum model that down‑weights extreme past returns, aiming to reduce momentum crashes. Back‑tested Sharpe ratios generally exceed those of the traditional 12‑month linear momentum strategy, especially for shorter look‑back windows and during...
Standardisation Helps
Investors and issuers are increasingly frustrated by the fragmented ESG reporting landscape, but the industry is coalescing around IFRS Sustainability Reporting and SASB standards. The lack of a universal disclosure framework has produced near‑zero correlation between major ESG rating agencies,...
No, Stocks Are Not a Good Inflation Hedge
A new Reuters analysis argues that U.S. equities fail as an inflation hedge, with real returns slipping sharply once inflation exceeds 3%. The piece notes that recent market rallies, driven by a tentative U.S.-Iran ceasefire and oil prices falling under...
China Is Expanding Its Trade War Toolbox
China has enacted a sweeping industrial and supply‑chain security law that establishes an early‑warning system to monitor disruptions and empowers the government to retaliate against foreign firms perceived as threatening Chinese interests. The regulation gives Beijing the authority to prohibit...
Which Imports Really Matter for Inflation
The closure of the Strait of Hormuz amid the Iran war has reignited global inflation, primarily through a sharp cut in crude oil supplies. Researchers Consonni and Magerman quantified each EU import’s inflationary impact with a Strategic Dependency Index, finding...
Making 18 Cents on the Dollar
UK banks have kept credit‑card interest rates near historic highs even as the Bank of England’s policy rate has dropped, creating a gap that fuels excess earnings. A chart from Panmure Liberum shows the divergence, indicating banks are not passing...
How to Finance Large Government Investments
Germany is earmarking roughly $545 billion each for defence and infrastructure over the next ten years, amounting to about $1.09 trillion – roughly 25% of its GDP. The bulk of this spending will be financed through new debt. Economic models, aligned with...