HBR: Maximizing Global Opportunities

Jeff Rosensweig

Professor Jeff Rosensweig spoke for the Harvard Business Review about maximizing global opportunities. FILE PHOTO

Associate Professor of Finance Jeff Rosensweig recently presented a webinar for Harvard Business Review in which he discussed some of the aspects of a changing world economy.

Rosensweig, a veteran economist, is also the director of the Global Perspectives Program at Goizueta.

The webinar, entitled “Maximizing Global Opportunities” includes commentary from Rosensweig and a plethora of charts showing growth — and decline — in economies around the world.

“There are over 200 economies on Earth but most of those are very small,” Rosensweig told participants. “If we look at the top 20 we encompass the vast majority of economic activity [and] financial wealth.”

Rosensweig pointed out the United States, though with its share of economic turmoil, is still — by far — the largest economy on Earth. China, he says, is leading in economic growth and recently passed Japan as the world’s No. 2 economy.

Rosensweig said every large economy should see growth in 2011 and 2012.

“However, because the recovery hasn’t been fast in many places… a lot of people are still doubtful whether we are in a recovery or just muddling along the bottom,” he said. “The forecast is [the United States] will grow about 2.5 percent a year. That’s better than having a double-dip recession but we need to grow that fast just to maintain our unemployment rate.”

Rosensweig also discussed countries experiencing large amounts of growth, especially in Asia and Africa. He also talked about the growing impact of U.S. debt, which as grown from $1 trillion in 1981 to more than $14 trillion today.

ABOUT THE EXPERT

Jeff Rosensweig is an associate professor of International Business and Finance. He is also Director of the Global Perspectives Program. Rosensweig specializes in global strategy, global economics and international finance. Prior to joining Emory in January 1988, he was Senior International Economist at the Federal Reserve Bank of Atlanta. Jeff has also taught at M.I.T. and in the economics department and the School of Management at Yale University. He also writes a regular column for the Atlanta Journal-Constitution.

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Hill: Downgrade Just Part of Market Downturn

The Dow Jones Industrial Average tumbled Monday as the reality of the nation’s credit rating downgrade from Standard & Poors began to sink in. The stock market dropped 634 points marking the worst day on Wall Street since fall 2008.

In the past two weeks, Dow Jones industrials are down 15 percent.

S&P moved to lower the United States credit rating from “AAA” to “AA+” over the weekend citing the recent debt ceiling debate and the government’s slow pace of setting a long-term, debt-reduction strategy.

It’s the first time in history the country has seen a reduction in its rating.

But Ray Hill, an assistant professor in the practice of finance at Goizueta, told 11Alive News the downgrade may not be the root cause of the recent turmoil in the markets.

Large economies in the European Union– including Italy, Spain and Greece — are facing sovereign debt issues. Hill says global strife is a major reason for the markets’ dive and that S&P’s reputation is somewhat in question.

“They didn’t get the mortgage crisis right,” he said. “They didn’t get Enron right. Enron was investment grade until a month before they went into bankruptcy.  I don’t think the Market really cares.  If you look at the 10-year bond, it hasn’t moved, which means people who buy U.S. Treasury Bonds do not care.  You don’t need the S&P to tell you that we have a debt problem or a dysfunctional government.”

ABOUT THE EXPERT

Hill (bio) joined Goizueta  in 2003 and teaches managerial economics and finance. Hill began his academic career by teaching economics at Princeton University, before leaving in 1982 to become an investment banker. In that role he worked around the world.  Hill returned to his native Georgia in 1993 and worked for ten years at Mirant Corporation and its predecessor, a subsidiary of Southern Company. During that time he served as the company’s chief financial officer, except for an eighteen month stint as a CEO of one of the largest independent power companies in Asia, which was owned by Southern. His expertise includes project finance, monetary policy and energy economics and finance.