Economics

The solution to the increasingly expensive U.S. health-care system is to abandon insurance plans and government programs — and throw the beast into the open marketplace, according to 2004 Nobel Laureate Edward C. Prescott, professor of economics at the W. P. Carey School of Business. Prescott outlined the economic logic of his economic hypothesis at a recent Phoenix symposium on the future of health care.

Using health information dating from the Civil War, researchers have arrived at some intriguing conclusions about the "environmentally induced change to human physiology" which has led to a steady increase of healthier longer-lived people in developed nations. A University of Chicago economics professor presented the study findings during a recent health care symposium in Phoenix. The remarkable findings identified the existence of a synergism between technological and physiological improvements which has produced "a form of human evolution that is biological but not genetic, rapid, culturally transmitted and not necessarily stable."

Tax breaks are widely promoted by economic development agencies and the business lobby as an effective tool to promote corporate investment. Cities use the offer of tax breaks to lure development - often to prevent neighboring communities from landing the companies with the most potential for creating jobs or sales. The practice is hotly debated, yet despite the controversy public officials appear unlikely to abandon it. An accounting scholar at the W. P. Carey School examined one form of tax incentive - corporate income tax breaks - and found evidence that in fact, the increased investment public officials hope to buy infrequently comes to pass.

Your company's most valuable resource may be locked inside the brains of employees. A W. P. Carey School of Business professor has written a paper that describes ways a business can unlock and use this powerful resource. "Measuring Knowledge Management Capabilities" presents a game plan for creating a knowledge management infrastructure that pinpoints knowledge sources and then helps employees solve problems and achieve goals, such as developing new products, raising an existing product's sales or boosting productivity.

When accounting problems at American International Group surfaced last winter, it looked like a small matter next to the corporation–busting scandals of the Enron era. But AIG directors acted as if the company's very survival was at stake, removing Maurice Greenberg as CEO and later forcing him to step down as chairman. The heart of the problem is this: No one can be sure how big the scandal will grow, because it involves business relationships, insurance products and accounting practices so arcane that few people understand them - including a controversial product known as "finite insurance."