Economics

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."

New research by W. P. Carey School of Business faculty finds that jobless recoveries have been with us far longer than most experts think. In fact, sluggish job growth has followed U.S. recessions since at least 1950. And there are ways employers can adjust their hiring and retention practices to better weather this phenomenon.

The European Union has faced some formidable hurdles since its debut in January 1999. Two economics professors examine the volatile history of the euro, and discuss its next critical test: France's voters head for the polls later this month to vote on the European Union's constitution, which aims to harmonize and streamline decision-making in the expanded 25-member EU.

When Wharton professor Karl Ulrich began thinking about ways to compensate for the pollution he caused in everyday life — including auto emissions — he came up with a novel idea, which he eventually pitched to the 41 students in his "Problem Solving, Design and System Improvement" class. The result is a new company called TerraPass. It works by selling memberships to people based on how much carbon dioxide their cars emit over the course of a year. The revenues from those sales are then invested in clean power and pollution reduction. So far, the company has negotiated three pollution-cutting deals and sold more than 300 memberships. If Terrapass starts to build momentum, Ulrich says, "It could have a huge impact" on the environment.