Those protests had little impact and the bans were removed in due course as the markets stabilized.

It’s now more than a year since those bans were imposed and we have a wealth of data to sift through to see whether the restrictions on short-selling worked. Alessandro Beber of the University of Amsterdam and Marco Pagano of the University of Naples Federico II have now carried out a study of the bans and regulatory constraints on short-selling during the recent financial crisis, by examining data for around 17,000 stocks from 30 countries. They compared the prices of stocks for which short-sales were restricted (financial stocks in some countries) with stocks that didn’t have these restrictions. They also estimated the impact of the ban by comparing stocks where short-selling was banned with similar stocks in countries where there was no ban.

Illustration: Jayachandran / Mint

Several months after the ban on short-sales had been imposed, in a telephone interview to Reuters, Christopher Cox, the former chairman of the US Securities and Exchange Commission who had banned short-selling of stocks for a few weeks, had the grace to say, “Knowing what we know now, I believe on balance the commission would not do it again. The costs (of the short-selling ban on financials) appear to outweigh the benefits."

How large are returns to schooling? Hint: Money isn’t everything, by Philip Oreopoulos and Kjell G. Salvanes, NBER

We all know that more schooling results in better jobs and higher incomes—at least if we compare college graduates with high school graduates and those who have done their MBA from those that haven’t. But Philip Ourepoulos and Kjell Salvanes of the US National Bureau of Economic Research are interested in measuring the non-pecuniary benefits of more schooling.

Illustration: Jayachandran / Mint

Other benefits include a lower probability of finding oneself unemployed, much better chances in the marriage market, improvement in decision-making capabilities that lead to better choices, including more stable marriages and better parenting. The authors provide a long list of benefits: “Schooling also encourages patience and long-term thinking. Teen fertility, criminal activity, and other risky behaviour decrease with it. Schooling promotes trust and civic participation. It teaches students how to enjoy a good book and manage money."

Perhaps all this is true in the US. But in India, where a PhD or a postgraduate study course is often taken up by people unable to get a better job, the link between good jobs and schooling may be tenuous. Why else do thousands of people with post-graduate degrees apply for menial jobs in Indian Railways? And does our education system, with its emphasis on rote learning, really promote trust and improve our decision-making skills?

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