The Connection Between Social Mobility and Democracy, and More – Chicago News
Let’s explore some of the most interesting stories that have emerged from Chicago business schools this week.
Is Social Mobility Essential to Democracy? – Kellogg Insights
Northwestern University Kellogg School of Management professor of managerial economics and decisions sciences Georgy Egorov, along with MIT Sloan’s Daron Acemoglu and Chicago Booth’s Konstantin Sonin, recently created a model to understand how voters’ beliefs about social mobility affect their political preferences.
Despite older generations becoming increasingly less optimistic with the potentially positive outcomes of future generations, the researchers find that there’s a decent probability that the children of future generations will rise to a higher economic and social class.
“Having many election cycles means that even with low mobility, the likelihood that a person’s decedents will eventually end up in another class is high. Egorov compares it to two lakes connected by a narrow straight. In the short term, they will not exchange much water. But over the long term, that small exchange will grow and grow until the waters are quite mixed.”
Speaking with Kellogg Insights, Egorov elaborated:
“In a certain sense, expectation of stability begets stability. A thick middle class makes democracy more stable than a thin one. Our research highlights the problems that may follow from a shrinking or thin middle class. Additionally, if the belief in the stability of democracy is undermined, people might well decide it’s not worth defending.”
You can read more about the trio’s research here.
Mendoza Marketing Professor Wins Research Award – Mendoza Ideas & News
The 2018 Louis W. Stern Award has officially been bestowed upon Shankar Ganesan, the John Cardinal O’Hara, C.S.C., professor of business and marketing department chair at the Notre Dame University Mendoza College of Business.
The award recognizes Ganesan, as well as co-authors Steven P. Brown of the University of Houston, Babu John Mariadoss of Washington State and Hillbun (Dixon) Ho of University of Technology Sydney for a 2010 article they published in the Journal of Marketing Research entitled, “Buffering and Amplifying Effects of Relationship Commitment in Business-to-Business Relationships.”
According to the article, “The paper examines the buffering and amplifying effects of relationship commitment on organizational buyers’ intentions to switch suppliers when a relationship is strained by the incumbent’s own misbehavior. “
Check out more from Ganesan’s research here.
The Road Ahead: Takeaways from Economic Outlook 2018 – Chicago Booth Magazine
Chicago Booth Magazine recently dove into the sold-out ‘Economic Outlook 2018’ event last January to “evaluate emerging trends [and] share their insights into the economic outlook for Wall Street and Main Street—ten years after the financial crisis.”
Randall S. Kroszner, the Chicago Booth Norman R. Bobins professor of economics, offered a few optimistic projections:
“I do think [the tax cut] is going to have a positive impact, both in the short run and the long run. I think the broad direction is fairly clear: cutting personal tax rates on a weighted average, of about three percent or so, will have positive impact on demand, because that’s going to allow for higher disposable income in the short run.”
Austan D. Goolsbee, Robert P. Gwinn professor of economics and the former chairman of the Council of Economic Advisers, offered slightly more tempered but optimistic projections as well:
“The danger areas continue to be worries about China, where there has been a big acceleration of debt, and a nagging feeling that we really don’t know what’s in the European financial institutions. That said, the overall growth around the world is looking a little better, for the first time in a little while.”
You can read more about Booth’s ‘Economic Outlook 2018’ overview here.
