David A. Moss

John G. McLean Professor of Business Administration

David Moss is the John G. McLean Professor at Harvard Business School, where he teaches in the Business, Government, and the International Economy (BGIE) unit. He earned his B.A. from Cornell University and his Ph.D. from Yale.  In 1992-1993, he served as a senior economist at Abt Associates. He joined the Harvard Business School faculty in July 1993.

Professor Moss’s research focuses on economic policy and especially the government’s role as a risk manager. He has published three books on these subjects: Socializing Security: Progressive-Era Economists and the Origins of American Social Policy (Harvard University Press,  1996), which traces the intellectual and institutional origins of the American welfare state; When All Else Fails: Government as the Ultimate Risk Manager (Harvard University Press, 2002), which explores the government’s pivotal role as a risk manager in policies ranging from limited liability law to federal disaster relief; and A Concise Guide to Macroeconomics: What Managers, Executives, and Students Need to Know (Harvard Business School Press, 2007), a primer on macroeconomics and macroeconomic policy.

In addition to these books, Moss has co-edited two volumes on economic regulation and has published numerous articles, book chapters, and case studies, mainly in the fields of institutional and policy history, financial history, political economy, and regulation.  One recent article, “An Ounce of Prevention: Financial Regulation, Moral Hazard, and the End of ‘Too Big to Fail’” (Harvard Magazine, Sept-Oct 2009), grew out of his research on financial regulation for the TARP Congressional Oversight Panel.

Professor Moss has created – and currently teaches – a financial history course in the second year of the MBA program entitled “Creating the Modern Financial System.” The course traces major developments in financial markets, institutions, and instruments from the early eighteenth century to today.

Professor Moss is the founder of the Tobin Project, a nonprofit research organization, and a member of the National Academy of Social Insurance. Recent honors include the Robert F. Greenhill Award, the Editors’ Prize from the American Bankruptcy Law Journal, the Student Association Faculty Award for outstanding teaching at the Harvard Business School (five times), and the American Risk and Insurance Association’s Annual Kulp-Wright Book Award for the “most influential text published on the economics of risk management and insurance.”

May 2012

Books

  1. Government and Markets: Toward a New Theory of Regulation

    Edward J. Balleisen and David A. Moss

    After two generations of emphasis on governmental inefficiency and the need for deregulation, we now see growing interest in the possibility of constructive governance, alongside public calls for new, smarter regulation. Yet there is a real danger that regulatory reforms will be rooted in outdated ideas. As the financial crisis has shown, neither traditional market-failure models nor public-choice theory, by themselves, sufficiently inform or explain our current regulatory challenges. Regulatory studies, long neglected in an atmosphere focused on deregulatory work, is in critical need of new models and theories that can guide effective policy-making. This interdisciplinary volume points the way toward the modernization of regulatory theory. Its essays by leading scholars move past predominant approaches, integrating the latest research about the interplay between human behavior, societal needs, and regulatory institutions. The book concludes by setting out a potential research agenda for the social sciences.

    Keywords: Governing Rules, Regulations, and Reforms; Government and Politics; Markets; Business and Government Relations; Research;

    Citation:

    Balleisen, Edward J., and David A. Moss, eds. Government and Markets: Toward a New Theory of Regulation. Cambridge: Cambridge University Press, 2010. View Details
  2. A Concise Guide to Macroeconomics: What Managers, Executives, and Students Need to Know

    David A. Moss

    Now more than ever before, executives and managers need to understand their larger economic context. In The Concise Guide to Macroeconomics, David Moss leverages his many years of teaching experience at Harvard Business School to lay out important macroeconomic concepts in engaging, clear, and concise terms. In a simple and intuitive way, he breaks down the ideas into "output," "money," and "expectations." In addition, Moss introduces powerful tools for interpreting the big-picture economic developments that shape events in the contemporary business arena. Detailed examples are also drawn from history to illuminate important concepts. This book is destined to become a staple in MBA courses--as well as the go-to resource for executives and managers at all levels seeking to brush up on their knowledge of macroeconomic dynamics.

    Keywords: Macroeconomics; Money; Investment; Management Analysis, Tools, and Techniques;

    Citation:

    Moss, David A. A Concise Guide to Macroeconomics: What Managers, Executives, and Students Need to Know. Boston: Harvard Business School Press, 2007. View Details
  3. When All Else Fails: Government as the Ultimate Risk Manager

    David A. Moss

    Keywords: Business and Government Relations; Risk Management;

    Citation:

    Moss, David A. When All Else Fails: Government as the Ultimate Risk Manager. Cambridge: Harvard University Press, 2002. (Winner of Kulp-Wright Book Award For the book considered to be the most influential text published on the economics of risk management and insurance presented by American Risk and Insurance Association.) View Details

Journal Articles

  1. Media versus Special Interests

    Alexander Dyck, David Moss and Luigi Zingales

    We argue that profit-maximizing media help to overcome the rational ignorance problem highlighted by Anthony Downs. By collecting news and combining it with entertainment, media are able to inform passive voters about regulation and other public policy issues, acting as a (partial) counterbalance to small but well-organized groups. To show the impact this information has on regulation, we document the effect muckraking magazines had on the voting patterns of U.S. representatives and senators on regulatory issues in the early part of the twentieth century. We also discuss the conditions under which media can serve to counterbalance special interests.

    Keywords: Media; Profit; Government and Politics;

    Citation:

    Dyck, Alexander, David Moss, and Luigi Zingales. "Media versus Special Interests." Journal of Law & Economics 56, no. 3 (August, 2013): 521–553. View Details
  2. Fixing What's Wrong with U. S. Politics

    David A. Moss

    In America today there's a growing sense that the political system is broken and that its ineffectiveness is a major threat to U.S. competitiveness. Why do so many think the political system is not working? Research shows that in Congress, Republicans and Democrats are more polarized than ever. They seem pulled apart by two starkly different conceptions of government: one viewing the government as inefficient, invasive, and easily corrupted, and another seeing it as a vehicle for solving people's problems. Yet the ideological divide may not be the true source of the breakdown. A look at U.S. history shows it's not new. Moreover, sharp ideological battles have often proved highly productive in policy terms, delivering the best ideas from both sides. In the 1840s, for instance, state politicians who were deeply skeptical of government pushed hard for balanced budget amendments while politicians at the other end of the spectrum demanded free public schools for all. In the end many states adopted both policies—-a combination that proved enormously powerful. The problem today is that too many have come to view politics as war, where victory is paramount and "compromise" is a dirty word. This take-no-prisoners approach, which came into sharp relief during the debt-ceiling debate, threatens to cripple the best-of-both dynamic. Revitalizing America's culture of democracy—where the health of the nation comes first, above economic interest, party, and ideology—is essential. Business leaders must play a large role in this effort, because the implications for the economy are so great.

    Keywords: Government and Politics; System; Conflict Management; Performance Productivity; Policy; Public Administration Industry; United States;

    Citation:

    Moss, David A. "Fixing What's Wrong with U. S. Politics." Harvard Business Review 90, no. 3 (March 2012). View Details
  3. Book Review of Beatrix Hoffman's The Wages of Sickness: The Politics of Health Insurance in Progressive America

    David A. Moss

    Keywords: Health Care and Treatment; Insurance; Health Industry; United States;

    Citation:

    Moss, David A. "Book Review of Beatrix Hoffman's The Wages of Sickness: The Politics of Health Insurance in Progressive America." Journal of Health Politics, Policy and Law 27, no. 5 (October 2002): 869–873. View Details
  4. The Rise of Consumer Bankruptcy: Evolution, Revolution, or Both

    David A. Moss and Gibbs A. Johnson

    Keywords: Insolvency and Bankruptcy;

    Citation:

    Moss, David A., and Gibbs A. Johnson. "The Rise of Consumer Bankruptcy: Evolution, Revolution, or Both." American Bankruptcy Law Journal 73 (spring 1999): 311–351. (Winner of American Bankruptcy Law Journal Editors' Prize Given annually for the best article to appear in the journal.) View Details

Book Chapters

  1. Capturing History: The Case of the Federal Radio Commission in 1927

    David Moss and Jonathan Lackow

    In the study of regulation (and political economy more generally), there is a danger that historical inferences from theory may infect historical tests of theory. It is imperative, therefore, that historical tests always involve a vigorous search not only for confirming evidence, but for disconfirming evidence as well. We undertake such a search in the context of a single well-known case: the Federal Radio Commission's (FRC) 1927 decision not to expand the broadcast radio band. The standard account of this decision holds that incumbent broadcasters opposed expansion (to avoid increased competition) and succeeded in capturing the FRC. Although successful broadcaster opposition may be taken as confirming evidence for this interpretation, our review of the record reveals even stronger disconfirming evidence. In particular, we find that every major interest group, not just radio broadcasters, publicly opposed expansion of the band in 1927, and that the broadcasters themselves were divided at the FRC's hearings.

    Keywords: Capture; History by Inference; Economic Theory of Regulation; Federal Radio Commission; United States;

    Citation:

    Moss, David, and Jonathan Lackow. "Capturing History: The Case of the Federal Radio Commission in 1927." Chap. 8 in Preventing Regulatory Capture: Special Interest Influence and How to Limit It, edited by Daniel Carpenter and David Moss. Cambridge: Cambridge University Press, 2013. View Details
  2. Lessons for the Financial Sector from 'Preventing Regulatory Capture: Special Interest Influence, and How to Limit It'

    Daniel Carpenter, David Moss and Melanie Wachtell Stinnett

    Citation:

    Carpenter, Daniel, David Moss, and Melanie Wachtell Stinnett. "Lessons for the Financial Sector from 'Preventing Regulatory Capture: Special Interest Influence, and How to Limit It'." Chap. 3 in The Making of Good Financial Regulation: Towards a Policy Response to Regulatory Capture, by Stefano Pagliari, 70–84. Guilford Press, 2012. View Details
  3. A Brief History of Risk Management Policy

    David Moss

    Keywords: History; Risk Management; Policy;

    Citation:

    Moss, David. "A Brief History of Risk Management Policy." Chap. 2 in Shared Responsibility, Shared Risk: Government, Markets and Social Policy in the Twenty-First Century, edited by Jacob Hacker and Ann O'Leary, 22–38. New York: Oxford University Press, 2012. View Details
  4. Reversing the Null: Regulation, Deregulation, and the Power of Ideas

    David Moss

    Keywords: Governing Rules, Regulations, and Reforms; Innovation and Invention; Government and Politics;

    Citation:

    Moss, David. "Reversing the Null: Regulation, Deregulation, and the Power of Ideas." Chap. 4 in Challenges to Business in the Twenty-First Century, edited by Gerald Rosenfeld, Jay W. Lorsch, and Rakesh Khurana, 35–49. Cambridge, MA: American Academy of Arts and Sciences, 2011. View Details
  5. The Paranoid Style in the Study of American Politics

    David Moss and Mary Oey

    What drives policy making in a democracy? The conventional view is that political actors, like economic actors, pursue their self interest, and that special interest groups dominate the policy making process by satisfying policy makers' need for money and other forms of political support. Indeed, many scholars regard this economic theory of regulation as a general theory of politics. George Stigler himself claimed that "temporary accidents aside," exceptions "simply will not arise: our extensive experience with the general theory in economics gives us the confidence that this is so." In this chapter, we suggest that exceptions—including major ones—may in fact arise. We focus on three historical cases in which special interests apparently gave way to the general interest in the policy making process: the enactment of Medicare in 1965, in which the powerful doctors' lobby failed in its bid to stop the legislation; the Voting Rights Act of 1965, which passed overwhelmingly despite the absence of any economically powerful interest group behind it; and the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund), which became law over the strenuous objections of the powerful chemical industry lobby. In all three of these cases (and especially in the latter two), the proposed legislation became unstoppable in the aftermath of a relevant horror story—e.g., Love Canal, in the case of Superfund—that received extensive coverage in the press. Although one could argue that we focus only on high-profile cases, and that capture theory applies more cleanly to policies that slip under the public's radar screen, we have never seen the economic theory of regulation advertised as "a theory of minor legislative events." Ultimately, the challenge for scholars will be to identify the conditions under which special interests dominate (or capture) public policy and the conditions under which they do not. Although such a task lies far beyond the scope of this chapter, the three cases surveyed here suggest at least one potentially important dynamic: that in the presence of a free press, real-life horror stories with bearing on policy issues may serve to blunt the power of special interests by informing and catalyzing public opinion.

    Keywords: Policy; Government Legislation; Media; Interests; Power and Influence; Public Opinion; United States;

    Citation:

    Moss, David, and Mary Oey. "The Paranoid Style in the Study of American Politics." In Government and Markets: Toward a New Theory of Regulation, edited by Edward J. Balleisen and David A. Moss. Cambridge: Cambridge University Press, 2010. View Details
  6. The Peculiar Politics of American Disaster Policy: How Television Has Changed Federal Relief

    David Moss

    Particularly since the 1960s, the federal government has played a significant role in financing disaster losses in the United States. The federal government may thus be thought of as providing an implicit form of public disaster insurance. However, unlike many long-standing public insurance programs, federal disaster "insurance" collects no premiums other than for flood risk. Why is public disaster relief financed differently from other forms of public insurance, such as unemployment insurance and deposit insurance? Although there are many possible explanations for this puzzle, one that deserves particular attention relates to the peculiar politics of disaster policy at the federal level and the special role that the news media appear to play in driving policy outcomes. As is well known, media coverage surges upward in the immediate aftermath of a disaster, throwing a bright spotlight on the victims, and then quickly dissipates. As a result, although the accumulated costs of disaster relief are quite high, the politics are typically played out one disaster at a time, in line with the media coverage. This dynamic appears to focus public attention more on the immediate benefits of emergency disaster assistance than on the long-term costs. Unless and until the public discussion can be reframed to look across disasters, rather than focusing on one disaster at a time, insurance-based policy reform may remain exceedingly difficult to achieve.

    Keywords: Insurance; Policy; Government and Politics; Media; Natural Disasters; United States;

    Citation:

    Moss, David. "The Peculiar Politics of American Disaster Policy: How Television Has Changed Federal Relief." Chap. 18 in The Irrational Economist: Making Decisions in a Dangerous World, edited by Erwann Michel-Kerjan and Paul Slovic, 151–160. New York: PublicAffairs Books, 2010. View Details
  7. Government as Risk Manager

    Tom Baker and David Moss

    We explain the four basic ways to manage risk: prevention, risk shifting, risk spreading, and loss control. We set out five principles of effective government risk management gleaned from extensive historical study: (1) link responsibility and control, (2) manage moral hazard, (3) pool risk in sound institutions, (4) adopt market conforming approaches to the extent possible, and (5) structure markets to promote safe products. Finally, we describe some promising new government risk management ideas that incorporate these principles.

    Keywords: Government and Politics; Risk Management; Risk and Uncertainty; Safety;

    Citation:

    Baker, Tom, and David Moss. "Government as Risk Manager." Chap. 4 in New Perspectives on Regulation, edited by David Moss and John Cisternino, 87–109. Cambridge, MA: Tobin Project, 2009. View Details

Working Papers

  1. Inequality and Decision Making: Imagining a New Line of Inquiry

    David Moss, Anant Thaker and Howard Rudnick

    The substantial increase in inequality in the United States over the past three decades has provoked considerable debate, with some analysts characterizing rising inequality as among the greatest threats facing the nation and others dismissing it as little more than a hiccup – or even celebrating it as a favorable development – in the progress of American capitalism. Despite numerous claims in popular venues that high inequality has slowed growth, precipitated financial instability, and profoundly distorted the nation's political system, our review of the literature finds no academic consensus on the consequences of inequality for the health of the economy or the democracy, or for nearly any other macro-level outcome. With the academic community reaching inconclusive and conflicting findings, we suggest that careful empirical study of possible mechanisms by which income inequality may exert macro-level effects is warranted. We suggest further that that one potential mechanism that may be especially worthy of investigation relates to possible effects of high or rising inequality on individual decision making. Drawing on nascent research, we examine a handful of pathways through which inequality may plausibly influence individual decisions. Finally, we propose ways that these and other pathways might be productively explored and assessed through behavioral experiments. By bringing together what are today two separate areas of research – decision making and inequality (or social disparity) – this new line of inquiry could help to break the stalemate that has, until now, characterized the study of inequality and its consequences.

    Keywords: Equality and Inequality; Income Characteristics; Decision Making; Government and Politics; Economics; United States;

    Citation:

    Moss, David, Anant Thaker, and Howard Rudnick. "Inequality and Decision Making: Imagining a New Line of Inquiry." Harvard Business School Working Paper, No. 13-099, June 2013. View Details
  2. Reversing the Null: Regulation, Deregulation, and the Power of Ideas

    David Moss

    It has been said that deregulation was an important source of the recent financial crisis. It may be more accurate, however, to say that a deregulatory mindset was an important source of the crisis—a mindset that, to a very significant extent, grew out of profound changes in academic thinking about the role of government. As scholars of political economy quietly shifted their focus from market failure to government failure over the second half of the twentieth century, they set the stage for a revolution in both government and markets, the full ramifications of which are still only beginning to be understood. This intellectual sea-change generated some positive effects, but also some negative ones, including (it seems) an excessively negative impression of the capacity of government to address problems in the marketplace. Today, as we consider the need for new regulation, particularly in the wake of the financial crisis, another fundamental shift in academic thinking about the role of government may be required-involving nothing less than a reversal of the prevailing null hypothesis in the study of political economy.

    Keywords: Financial Crisis; Financial Markets; Governing Rules, Regulations, and Reforms; Government and Politics; Failure; Business and Government Relations; Financial Services Industry; United States;

    Citation:

    Moss, David. "Reversing the Null: Regulation, Deregulation, and the Power of Ideas." Harvard Business School Working Paper, No. 10-080, October 2010. View Details
  3. An Ounce of Prevention: The Power of Public Risk Management in Stabilizing the Financial System

    David A. Moss

    The magnitude of the current financial crisis reflects the failure of an economic and regulatory philosophy that had proved increasingly influential in policy circles over the past three decades.

    This paper suggests (1) that contrary to the prevailing wisdom, New Deal policies (including federal deposit insurance and bank supervision) worked to stabilize the financial system; (2) that the financial catastrophe of 2007-2009 was not an accident, but rather a mistake, driven by a deregulatory mindset that took 50 years of post-New Deal financial stability for granted; and (3) that the dramatic federal response to the current financial crisis has created a new reality, in which virtually all systemically significant financial institutions now enjoy an implicit guarantee from the federal government that will continue to exist (and continue to generate moral hazard) long after the immediate crisis passes.

    Based on this analysis, one major step that is necessary now to help ensure financial stability in the future is to identify and regulate "systemically significant" institutions on an ongoing basis, rather than simply in the heat of a crisis. To guard against moral hazard (in the face of large implicit guarantees) and to ensure the safety of the broader financial system, these institutions must face significant prudential regulation, they should be required to pay premiums for the federal insurance they already enjoy, and they should be subject to an FDIC-style receivership process in the event of failure.

    Keywords: Financial Crisis; Financial Institutions; Governing Rules, Regulations, and Reforms; Risk Management; Business and Government Relations; Balance and Stability;

    Citation:

    Moss, David A. "An Ounce of Prevention: The Power of Public Risk Management in Stabilizing the Financial System." Harvard Business School Working Paper, No. 09-087, January 2009. View Details
  4. Media versus Special Interests

    Alexander Dyck, David A. Moss and Luigi Zingales

    We argue that profit-maximizing media helps overcome the problem of "rational ignorance" highlighted by Downs (1957) and in so doing makes elected representatives more sensitive to the interests of general voters. By collecting news and combining it with entertainment, media are able to inform passive voters on politically relevant issues. To show the impact this information has on legislative outcomes, we document the effect "muckraking" magazines had on the voting patterns of U.S. representatives and senators in the early part of the 20th century. We also show under what conditions profit-maximizing media will cater to general (less affluent) voters in their coverage, providing a counterbalance to special interests.

    Keywords: Voting; Government Legislation; Media; Interests; Power and Influence; United States;

    Citation:

    Dyck, Alexander, David A. Moss, and Luigi Zingales. "Media versus Special Interests." NBER Working Paper Series, No. 14360, September 2008. View Details
  5. Rethinking the Role of History in Law & Economics: The Case of the Federal Radio Commission in 1927

    David A. Moss and Jonathan B. Lackow

    In the study of law and economics, there is a danger that historical inferences from theory may infect historical tests of theory.  It is imperative, therefore, that historical tests always involve a vigorous search not only for confirming evidence, but for disconfirming evidence as well. We undertake such a search in the context of a single well-known case: the Federal Radio Commission's (FRC's) 1927 decision not to expand the broadcast radio band. The standard account of this decision holds that incumbent broadcasters opposed expansion (to avoid increased competition) and succeeded in capturing the FRC. Although successful broadcaster opposition may be taken as confirming evidence for this interpretation, our review of the record reveals even stronger disconfirming evidence. In particular, we find that every major interest group, not just radio broadcasters, publicly opposed expansion of the band in 1927, and that broadcasters themselves were divided at the FRC's hearings.

    Keywords: Decision Choices and Conditions; Government Legislation; Economic History; Law; Media and Broadcasting Industry;

    Citation:

    Moss, David A., and Jonathan B. Lackow. "Rethinking the Role of History in Law & Economics: The Case of the Federal Radio Commission in 1927." Harvard Business School Working Paper, No. 09-008, August 2008. View Details
  6. Macro for Managers

    David A. Moss

    This note attempts to provide a conceptual overview of macroeconomics. Designed for managers and students of management, it emphasizes fundamental ideas and relationships, rather than mathematical models and formulas. The note identifies—and is structured around—three essential pillars of macroeconomics: output, money, and expectations.

    Keywords: Macroeconomics; Money; Relationships; Performance Expectations;

    Citation:

    Moss, David A. "Macro for Managers." Harvard Business School Working Paper, No. 05-042, January 2005. View Details
  7. Regulation and Reaction: The Other Side of Free Banking in Antebellum New York

    David A. Moss and Sarah Brennan

    Free banking, which first appeared in the United States in the late 1830s, comprised two essential features: general incorporation for banks and rigorous security requirements for note issue. Because the general incorporation feature is what allowed free entry, it has typically been heralded as the centerpiece of the institution, leading some scholars to characterize free banking as laissez faire banking. Far from allowing free bankers complete freedom of action, however, free banking laws actually prohibited the most common form of intermediation of the time. By requiring that bank notes be fully backed with high-grade securities, these laws prevented banks from intermediating between liquid notes on the one hand and illiquid loans on the other. The purpose for this paper, therefore, is to explore the other side of free banking—the regulatory side which banned the use of notes as a source of funds for non-marketable lending. After tracing the intellectual and legislative history of free banking in New York State (the first state to adopt an enduring free banking statute), we show that New York's 1838 law placed significant constraints on note issue, which ultimately helped to transform the nature of bank money throughout the state. We find, in particular, that these constraints led to a significant reduction in the issue of bank notes and a concomitant increase in the relative importance of demand deposits. This effect is visible not only by comparing note-to-deposit ratios in free versus chartered banks, but also by tracking changes in this ratio among a sample of chartered banks that were forced to convert to free banks when their charters expired (at scattered moments throughout the 1840s and 1850s). We conclude that the rise of free banking not only enhanced competition in the market for banking services (as a result of free entry) but fundamentally transformed bank balance sheets as well (as a result of the strict security requirement for note issue).

    Keywords: History; Law; Competition; Financial Liquidity; Money; Market Entry and Exit; Financing and Loans; Banks and Banking; Banking Industry;

    Citation:

    Moss, David A., and Sarah Brennan. "Regulation and Reaction: The Other Side of Free Banking in Antebellum New York." Harvard Business School Working Paper, No. 04-038, April 2004. View Details

Cases and Teaching Materials

  1. Steering Monetary Policy Through Unprecedented Crises

    David Moss and Cole Bolton

    In early April 2008, economic conditions in Europe appeared to be deteriorating on almost all fronts: sales figures were falling, business and consumer confidence were slumping, forecasts for European growth were being revised downward, and inflation was rising. In fact, figures for the month of March revealed that inflation had reached an annualized rate of 3.5%, Europe's highest level since 1992. On top of these broad economic problems, the European financial sector–indeed, the financial sector worldwide–was in turmoil. By April 2008, global financial institutions had written down the value of their mortgage-related investments and other assets by at least $230 billion, and businesses around the world were complaining that it was ever more difficult to secure credit. In America, meanwhile, consumer confidence was falling, consumer spending had slowed to a near halt, and inflation had crept above 4%. In reaction to these dismal economic conditions, the Federal Reserve had steadily cut interest rates over a seven-month period, most recently lowering its key rate to 2.25% on March18. In sharp contrast to the Fed, the European Central Bank (ECB) had long held its key rate at 4%, where it stood when the ECB's Governing Council reconvened on April 10, 2008. Given both the market turmoil and the evident inflationary pressure, members of the ECB's Governing Council would have to weigh the available data extremely carefully as they decided whether to raise, lower, or maintain their benchmark interest rate. The significance of this decision could hardly be overstated, since it had the potential to send a strong signal about the nature of European monetary policy and the priorities of the ECB going forward.

    Keywords: Forecasting and Prediction; Economic Slowdown and Stagnation; Financial Crisis; Inflation and Deflation; Financial Institutions; Interest Rates; Policy;

    Citation:

    Moss, David, and Cole Bolton. "Steering Monetary Policy Through Unprecedented Crises." Harvard Business School Case 711-048, June 2011. View Details
  2. Fighting a Dangerous Financial Fire: The Federal Response to the Crisis of 2007-2009

    David Moss and Cole Bolton

    By the summer of 2009, many observers concluded that a catastrophic financial collapse- which seemed all but imminent the previous fall and winter - had been averted. Although the recession had still yet to be declared over and the economy's footing remained far from solid, many believed that the worst of the crisis was over. With the global financial system no longer spiraling into an abyss, government officials, business leaders, and American taxpayers could now take stock of where they had been and where they should be headed. In particular, many wondered how the disaster had happened in the first place: what exactly had caused the brutal financial crisis of 2007-2009?

    Keywords: Business Cycles; Economic Slowdown and Stagnation; Financial Crisis; Financial Institutions; Financial Markets; Financial Strategy; Policy; Knowledge Acquisition;

    Citation:

    Moss, David, and Cole Bolton. "Fighting a Dangerous Financial Fire: The Federal Response to the Crisis of 2007-2009." Harvard Business School Case 711-104, June 2011. View Details
  3. Inequality and Globalization

    David A. Moss, Anna Harrington and Jonathan Schlefer

    Inequality represented a major issue at the dawn of the 21st century. By many measures, inequality had increased over the previous several decades, within both developed and developing countries. Whether global inequality (measured across countries or among the people of the world) increased remained controversial. Even in those cases where experts agreed that inequality had risen, there was little consensus about the causes. Some blamed globalization for the growing gulf between rich and poor, whereas others pointed to technology, government policies, and even social norms. Experts also disagreed over whether rising inequality was even a problem, particularly in those places where the poverty rate was low or falling.

    Keywords: Equality and Inequality; Wealth and Poverty; Income Characteristics; Globalization;

    Citation:

    Moss, David A., Anna Harrington, and Jonathan Schlefer. "Inequality and Globalization." Harvard Business School Background Note 705-040, May 2005. (Revised May 2011.) View Details
  4. Danatbank

    David A. Moss, Cole Bolton and Andrew Novo

    In the summer of 1931, Germany was struggling with a deepening economic crisis. Production had fallen, unemployment was high, and bank deposits and gold were being withdrawn from the country at a rapid pace, threatening the value of the German mark. The country's third largest bank, the Danatbank, was especially hard hit by the flagging economy and the flight of capital. By July, the Danatbank was on the verge of collapse, and the bank's charismatic and controversial senior partner, Jakob Goldschmidt, appealed personally to the government, the central bank, and his private banking rivals for a lifeline.

    Keywords: History; Risk Management; Business History; Capital Markets; Financial Crisis; Banks and Banking; Business and Government Relations; Banking Industry; Germany;

    Citation:

    Moss, David A., Cole Bolton, and Andrew Novo. "Danatbank." Harvard Business School Case 710-059, March 2010. (Revised December 2010.) View Details
  5. The Pecora Hearings

    David A. Moss, Cole Bolton and Eugene Kintgen

    In 1932, in the depths of the Great Depression, the Senate Banking Committee began a much-publicized investigation of the nation's financial sector. The hearings, which came to be known as the Pecora hearings after the Banking Committee's lead counsel Ferdinand Pecora, revealed how the country's most respected financial institutions knowingly misled investors as to the desirability of certain securities, engaged in irresponsible investment behavior, and offered privileges to insiders not afforded to ordinary investors. During the famous “Hundred Day” congressional session that began his presidency, Roosevelt signed two bills meant to prevent some of these abuses, but he also believed that the government should play a more active role in the financial system by regulating national securities exchanges. In February 1934, the president urged Congress to enact such legislation, prompting the introduction of a bill entitled the Securities Exchange Act, which would force all securities exchanges to register with the Federal Trade Commission, would curtail the size of loans that could be advanced to securities investors, and would ban a number of practices (such as short-selling) that were thought to facilitate stock manipulation. Additionally, the legislation would require that all companies with exchange-listed securities publish detailed business reports as frequently as the FTC desired. Wall Street, represented in particular by New York Stock Exchange (NYSE) President Richard Whitney, took a strong position against the Securities Exchange Act. Whitney was ultimately summoned to testify during the congressional hearings on the Securities Exchange Act in late February 1934. Would he be able to convince lawmakers to take a different course, or would his arguments fail to win over those who believed that strict regulations were exactly what financial markets required following the Great Crash?

    Keywords: Financial Crisis; Fairness; Borrowing and Debt; Financial Institutions; Debt Securities; Stocks; Governing Rules, Regulations, and Reforms; Government Legislation; Financial Services Industry; United States;

    Citation:

    Moss, David A., Cole Bolton, and Eugene Kintgen. "The Pecora Hearings." Harvard Business School Case 711-046, December 2010. View Details
  6. Financing Higher Education in Australia

    David A. Moss and Stephanie Lo

    Even before Australian lawmakers abolished university tuition in 1973, students in Australia had long benefited from low tuition and large government subsidies. By the early 1980s, however, the nation's universities faced growing budget challenges and an apparent shortage of capacity as demand for higher education surged. Policymakers, cognizant of a growing budget deficit as well as a hard-hitting recession, hesitated to provide increased funding to higher education. The debate over how best to finance Australian higher education finally came to a head in the late 1980s, following publication of the Report of the Committee on Higher Education Funding (commonly known as the Wran Report). Although the Wran Committee had considered several potential funding schemes, it ultimately proposed a radical system in which students would pay tuition financed through income-contingent loans provided by the government. The Wran Report proved to be of particular interest to the Australian Prime Minister, Robert Hawke. The government's fiscal position seemed to demand that educational financing be overhauled, but there was no consensus on how best to do this. Could the Prime Minister convince his Australian Labor Party to abandon the free-education plank in its platform? And even if he could, how could he be sure that the Wran Committee's strategy was the right one and that its recommendations were workable? Would following an American model of full tuition for higher education and government-guaranteed student loans make more sense? These were just a few of the questions that the Prime Minister confronted as he contemplated new approaches for financing higher education in Australia.

    Keywords: Economic Slowdown and Stagnation; Higher Education; Borrowing and Debt; Governing Rules, Regulations, and Reforms; Policy; Education Industry; Australia;

    Citation:

    Moss, David A., and Stephanie Lo. "Financing Higher Education in Australia." Harvard Business School Case 711-047, December 2010. View Details
  7. The Dojima Rice Market and the Origins of Futures Trading

    David A. Moss and Eugene Kintgen

    In 1730, Japanese merchants petitioned shogun Tokugawa Yoshimune to officially authorize trade in rice futures at the Dojima Exchange, the world's first organized (but unsanctioned) futures market. For many years, the Japanese government had prohibited the trade of futures bills because it was widely regarded as a form of gambling that caused rice prices to rise. However, when the price of rice fell to record lows in the late 1720s, the samurai (whose income was tied to the value of rice) saw their economic position fall relative to the merchant class, whose growing economic power worried the nation's elites. The shogun responded by easing restrictions on futures trading, but without officially sanctioning a futures market at Dojima. The question now was whether he should heed the merchants' petition and take the next step.

    Keywords: Futures and Commodity Futures; Price; Food; Business History; Market Transactions; Business and Government Relations; Japan;

    Citation:

    Moss, David A., and Eugene Kintgen. "The Dojima Rice Market and the Origins of Futures Trading." Harvard Business School Case 709-044, January 2009. (Revised November 2010.) View Details
  8. Wall Street's First Panic (A)

    David A. Moss and Cole Bolton

    In the early 1790s, a flood of newly issued public and private securities sparked an investment boom in the nascent United States. In New York, the bustling commercial district along Wall Street emerged as the center of the city's securities trade. One of the many Americans drawn into the frenetic and largely unregulated securities market was William Duer, who ultimately became a major player on the Street. As it turned out, however, Duer's financial dealings proved unsustainable, and his financial collapse helped to bring the securities boom to a halt. Shocked by the widespread devastation wrought by Wall Street's first panic, the New York legislature acted quickly to ban outdoor securities auctions and a popular class of financial instruments known as "time bargains," both of which were thought to have contributed to the boom and bust on Wall Street. Facing public outrage along with the new legal restrictions, New York's top brokers had to decide whether a new system for securities trading was needed and, if so, what it should look like.

    Keywords: History; Financial Instruments; Auctions; Financial Crisis; Business and Government Relations; Financial Services Industry;

    Citation:

    Moss, David A., and Cole Bolton. "Wall Street's First Panic (A)." Harvard Business School Case 708-002, December 2007. (Revised September 2009.) View Details
  9. Financing American Housing Construction in the Aftermath of War

    David Moss and Cole Bolton

    At the start of WWI, the United States faced a significant housing shortage. Public officials feared the spread of disease-and even communism-in the nation's cramped urban centers where vacancy rates held near zero and families often "doubled up" in single-housing units. Hoping to spark a burst of new construction, New York Senator William Calder called for the creation of eleven regional Federal Building Loan Banks that would serve as a new source of funds for mortgage lenders. The proposal was controversial, however. Opponents disliked the fact that the Federal Building Loan Banks would have the authority to issue tax-free, mortgage-backed bonds, and many claimed that the private market would solve the housing shortage on its own. Proponents of the bill, meanwhile, believed that it was necessary to stave off a potentially disastrous and protracted housing shortage, and they cited the long-successful mortgage bond markets in France and Germany as evidence that their plan could succeed. Federal lawmakers had to assess the arguments on both sides and render a decision.

    Keywords: Central Banking; Bonds; Mortgages; Government Legislation; Business History; Housing; Banking Industry; United States;

    Citation:

    Moss, David, and Cole Bolton. "Financing American Housing Construction in the Aftermath of War." Harvard Business School Case 708-032, January 2008. (Revised September 2009.) View Details
  10. Fannie Mae: Public or Private?

    David A. Moss and Cole Bolton

    In 1987, President Ronald Reagan established the President's Commission on Privatization to identify federal government functions that could be shifted to the private sector. One agency that the Commission considered was the Federal National Mortgage Association, or Fannie Mae. Fannie Mae was a Depression-era creation that was charged with establishing a secondary market for home loans. By purchasing qualifying residential mortgages from individual home loan issuers, Fannie Mae provided these institutions with funds for the continued issuance of mortgages, thereby promoting the government's goal of increased homeownership. Although lawmakers had already partially privatized Fannie Mae in 1954 and again in 1968, the agency in 1987 still retained close links to the federal government, including an emergency line of credit from the U.S. Treasury. After its deliberations, the President's Commission recommended Fannie Mae be restructured into a fully private firm. Now it was up to Congress and the President to decide whether to accept and implement the Commission's findings.

    Keywords: Restructuring; Financial Institutions; Mortgages; Government and Politics; Business History; Privatization; United States;

    Citation:

    Moss, David A., and Cole Bolton. "Fannie Mae: Public or Private?" Harvard Business School Case 709-025, February 2009. View Details
  11. The Federal Reserve and the Banking Crisis of 1931

    David A. Moss and Cole Bolton

    In early October 1931, in the midst of a global economic depression, the U.S. banking system was in crisis—with bank suspensions running at near record levels. At the same time, the broader economy was sputtering, and U.S. gold reserves had come under severe pressure after Britain abandoned its gold standard in mid-September. As pressure continued to mount, the leaders of the Federal Reserve faced several critical decisions. Should they adjust interest rates? Was abandoning the gold standard an acceptable option? Should they lend more freely to the nation's commercial banks? Or would this only ensure the sorts of financial excess that had gotten the country into trouble in the first place? Was it time to give in to the mounting pressure, or to hold firm?

    Keywords: Decision Choices and Conditions; Financial Crisis; Central Banking; Business History; Crisis Management; Banking Industry; United States;

    Citation:

    Moss, David A., and Cole Bolton. "The Federal Reserve and the Banking Crisis of 1931." Harvard Business School Case 709-040, January 2009. View Details
  12. The Armstrong Investigation

    David Moss and Eugene Kintgen

    In the early 20th century, public outrage at certain life insurance practices led to an investigation in New York State that threatened to curtail growth in the industry. Charles Evans Hughes guided the four-month-long Armstrong Investigation, which made startling revelations, and offered a number of controversial recommendations, several of which would forbid the most popular form of life insurance (tontine insurance), limit the growth of life insurers (which included several of the nation's largest financial institutions at the time), and prevent insurance firms from owning the stock of other companies. The New York State legislature approved all of the recommended measures, and sent the bill to the Governor for his signature. The life insurance industry objected, however, claiming that some of the new rules would reduce consumer choice and unnecessarily lower returns on company investments.

    Keywords: Crime and Corruption; Annuities; Insurance; Governing Rules, Regulations, and Reforms; Insurance Industry; New York (state, US);

    Citation:

    Moss, David, and Eugene Kintgen. "The Armstrong Investigation." Harvard Business School Case 708-034, January 2008. (Revised January 2009.) View Details
  13. The South Sea Company (A)

    David A. Moss, Eugene Kintgen and Agnieszka Rafalska

    In early 1720, the South Sea Company and the Bank of England were cometing for the right to issue new shares and to exchange those shares for government bons that were then in the hands of the public. The British government had already executed two such debt conversion with the South Sea Company. Most individuals who had converted bonds for shares in 1711 and 1719 had seen their South Sea shares appreciate in the meantime, and the government had lowered its debt servicing costs as a result of these two conversions. The conversion under consideration in 1720, however, would be ona much larger scale. In time, the South Sea Company won the bidding war, and the House of Commons approved its debt conversion plan. Now it was up to the House of Lords to approve or reject the deal.

    Keywords: Borrowing and Debt; Debt Securities; Stock Shares; Financial Strategy; Bids and Bidding; Business and Government Relations; Banking Industry; Financial Services Industry; Great Britain;

    Citation:

    Moss, David A., Eugene Kintgen, and Agnieszka Rafalska. "The South Sea Company (A)." Harvard Business School Case 708-005, December 2007. (Revised December 2008.) View Details
  14. The Deutsche Bank (A)

    David A. Moss

    Founded in 1870 to help finance surging German exports and imports, the Deutsche Bank soon moved into domestic banking. In fact, its founders aimed to create both a commercial bank and an investment bank under one roof—that is, a "universal bank." By the end of the nineteenth century, the Deutsche Bank was not only the largest bank in Germany, but also a strategic actor in the broader European market and, indeed, in the world economy. Over the first half of the twentieth century, however, the bank faced a series of national crises: defeat in WWI (1914-1918), revolution in 1919, hyperinflation in 1923, economic depression in the early 1930s, the rise of Hitler in 1933, another world war in 1939, and then total defeat in 1945. At the end of WWII, the Soviets closed the Berlin headquarters of the Deutsche Bank as part of their denazification effort. Meanwhile, the United States, Britain, and France, occupying the western portion of Germany, attempted to implement a policy of economic decentralization and broke what remained of the bank into small pieces. By 1950, facing a proposal from leading German bankers to allow the big banks to begin reconstituting themselves, the Allied powers and the new German legislature had to decide whether to accept this proposal or reject it.

    Keywords: History; Investment Banking; Commercial Banking; Banking Industry; Germany;

    Citation:

    Moss, David A. "The Deutsche Bank (A)." Harvard Business School Case 708-044, January 2008. View Details
  15. Ruling the Modern Corporation: The Debate over Limited Liability in Massachusetts

    David A. Moss and Eugene Kintgen

    In 1830, Governor Levi Lincoln, Jr. urged the Massachusetts state legislature to introduce a limited liability regime for manufacturing corporations similar to that adopted in neighboring states. At least since 1809, shareholders in the state's manufacturing corporations had faced unlimited liability, which held shareholders personally liable for corporate debts. While unlimited liability was meant to ensure financial prudence, Lincoln and others worried that this policy was doing more harm than good and driving capital from the state. With the governor pushing for action, it was up to the state legislature to decide how to proceed.

    Keywords: Capital; Debt Securities; Legal Liability; Production; Business and Shareholder Relations; Manufacturing Industry;

    Citation:

    Moss, David A., and Eugene Kintgen. "Ruling the Modern Corporation: The Debate over Limited Liability in Massachusetts." Harvard Business School Case 708-016, December 2007. View Details
  16. Envisioning "Free Banking" in Antebellum New York (A)

    David A. Moss and Cole Bolton

    Banks throughout New York State suspended specie payments (i.e., payments in gold and silver) in May 1837 following the collapse of several state banks and the onset of a nationwide financial panic. Amid the chaos, the upstart Whigs were able to depose the longstanding Republican majority in the state legislature. Responding to citizen anger, as well as perennial calls for more banking capital, the Whigs drafted a novel "free banking" bill, which would override the established bank chartering mechanism and allow any association with sufficient capital the opportunity to open a bank and issue bank notes (a widely accepted form of paper money at the time). The bill also required that every note issued by a New York bank be fully backed by bonds or mortgages. If enacted, the bill seemed likely to encourage the establishment of many new banks. There was no telling what the economic impact of the bill's special bank note provisions would be. Once the bill passed the legislature, Governor Marcy had to decide whether to sign this radical proposal into law.

    Keywords: History; Government Legislation; Capital; Financial Crisis; Banks and Banking; Banking Industry;

    Citation:

    Moss, David A., and Cole Bolton. Envisioning "Free Banking" in Antebellum New York (A). Harvard Business School Case 708-038, December 2007. View Details
  17. The Campaign for Bank Insurance in Antebellum New York

    David A. Moss and Cole Bolton

    The New York State Legislature had come to a standstill in 1829 as lawmakers refused to charter any new banks or recharter any existing banks. Four of New York's forty banks had failed since 1825, and many legislatures believed that a significant change in the banking regime was needed to shore up the state's financial systems. Others, however, feared that a major change in the law was too risky, especially since over three-quarters of the state's banks held charters that were slated to expire over the next four years. On the table was a completely untested proposal to create a mandatory public insurance fund that would back the banknotes and deposits of every state bank. As bank charters throughout New York State rapidly approached expiration, lawmakers faced a tough decision: should they pass the bill and gamble with the untried insurance fund, or should they go seek a more traditional solution to the state's banking woes?

    Keywords: History; Risk Management; Government Legislation; Insurance; Decision Choices and Conditions; Banks and Banking; Banking Industry;

    Citation:

    Moss, David A., and Cole Bolton. "The Campaign for Bank Insurance in Antebellum New York." Harvard Business School Case 708-037, December 2007. View Details
  18. Managing Failure: American Bankruptcy Law at a Crossroads

    David A. Moss, Mary Oey and Jonathan Lackow

    Introduces the core principles and challenges of bankruptcy law (both individual and corporate) against the backdrop of the early 1970s, when the U.S. bankruptcy system appeared to be failing. With personal bankruptcy filings at record levels and successful corporate reorganizations relatively rare, policymakers had to decide whether the time had come to overhaul the nation's bankruptcy law and, if so, how to structure the new system.

    Keywords: Change; Insolvency and Bankruptcy; Policy; Government Legislation; United States;

    Citation:

    Moss, David A., Mary Oey, and Jonathan Lackow. "Managing Failure: American Bankruptcy Law at a Crossroads." Harvard Business School Case 705-024, January 2005. View Details
  19. Basic Statistics from the World Bank's World Development Indicators, 2004

    David A. Moss, Sarah A. Brennan and Peter Epstein

    Provides basic economic and social indicators for 145 countries, drawn from the World Bank's World Development Indicators (2004). The data include: population, land area, GNP per capita, real GDP growth, life expectancy, adult illiteracy, fertility rate, access to sanitation, and income inequality. Reports data from 2000 whenever possible and is largely based on Basic Statistics from World Bank's World Development Report 2002 (9-703-030).

    Keywords: Equality and Inequality; Wealth and Poverty; Standards; Economics; Society;

    Citation:

    Moss, David A., Sarah A. Brennan, and Peter Epstein. "Basic Statistics from the World Bank's World Development Indicators, 2004." Harvard Business School Supplement 705-022, December 2004. View Details
  20. American System, The

    David A. Moss, Tiffany Morris and Sarah A. Brennan

    Traces the economic development of the United States from 1790 to 1857, focusing especially on the struggle between free traders and protectionists over federal tariff policy. Devotes considerable attention to the nation's political system, its evolving common law, basic factors of production (land, labor, and capital), and key sectors (agriculture, manufacturing, transportation, etc.).

    Keywords: Business History; Economic Growth; Government and Politics; United States;

    Citation:

    Moss, David A., Tiffany Morris, and Sarah A. Brennan. "American System, The." Harvard Business School Case 704-036, February 2004. View Details
  21. Macroeconomic Policy and the State of the U.S. Economy, 2003

    David A. Moss

    Based on excerpts from Federal Reserve Chairman Alan Greenspan's testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs on July 16, 2003, as well as economic data that were available to Chairman Greenspan at the time. Taken together, the text and data provide a survey of the U.S. economy and the major challenges that U.S. economic policymakers faced in 2003.

    Keywords: Macroeconomics; Banks and Banking; Policy; Housing; Data and Data Sets; Problems and Challenges; Urban Development; United States;

    Citation:

    Moss, David A. "Macroeconomic Policy and the State of the U.S. Economy, 2003." Harvard Business School Case 704-030, January 2004. View Details
  22. Insurer of Last Resort? The Federal Financial Response to September 11

    David A. Moss and Sarah A. Brennan

    Examines the federal financial response to September 11, 2001: the airline bailout, the victim compensation fund, emergency aid to New York and Washington, and terrorism reinsurance. Less than two weeks after the attacks, the government had committed almost $40 billion to relieving the victims and safeguarding the economy. A little over a year later, these measures were joined by the creation of a federal terrorism reinsurance program, originally proposed by the White House in October 2001. On the surface, the federal financial response to September 11 was puzzling. Did the enormity of the attacks weaken the country's commitment to laissez-faire principles? Or is the traditional attitude toward government economic intervention in the United States more complicated than the phrase "laissez-faire" (or "free market") implies? Explores the appropriate role of government in managing risk and responding to disasters and then asks students to consider whether each of the various initiatives--and indeed the program as a whole--was a success or a failure.

    Keywords: Business and Government Relations; Insurance; Risk Management; United States;

    Citation:

    Moss, David A., and Sarah A. Brennan. "Insurer of Last Resort? The Federal Financial Response to September 11." Harvard Business School Case 703-041, March 2003. View Details
  23. National Economic Accounting: Past, Present, and Future

    David A. Moss and Sarah A. Brennan

    Presents the fundamentals of GDP accounting (including definitions, etc.), examines the history of national accounting, and surveys the international debate over "Green GDP." The first section explains the basic rules and definitions of national economic accounting and the meaning of GDP versus NDP. The second section provides historical context for the development of national income estimates, 1886 to 1940, culminating in the creation of GNP by the U.S. Department of Commerce in the 1940s. The third and final section discusses the standard imputations currently made to reflect nonprice economic activity (e.g., for owner-occupied housing and government services) and explores the debate over imputations for natural resources and environmental quality.

    Keywords: History; Natural Environment; Quality; Accounting; Forecasting and Prediction; Environmental Sustainability; Economy; United States;

    Citation:

    Moss, David A., and Sarah A. Brennan. "National Economic Accounting: Past, Present, and Future." Harvard Business School Case 703-026, December 2002. View Details
  24. Basic Statistics from the World Bank's World Development Indicators, 2002

    David A. Moss and Sarah A. Brennan

    Supplements National Economic Accounting: Past, Present, and Future.

    Keywords: Non-Governmental Organizations; Data and Data Sets;

    Citation:

    Moss, David A., and Sarah A. Brennan. "Basic Statistics from the World Bank's World Development Indicators, 2002." Harvard Business School Supplement 703-030, December 2002. View Details
  25. World Trade Organization, The

    David A. Moss and Nick Bartlett

    Explores the origins and workings of the World Trade Organization (WTO), focusing particular attention on the special challenges of trade liberalization at the dawn of the 21st century.

    Keywords: Trade; Business History; Problems and Challenges;

    Citation:

    Moss, David A., and Nick Bartlett. "World Trade Organization, The." Harvard Business School Case 703-015, September 2002. View Details
  26. Note on WTO Disputes: Five Major Cases

    David A. Moss and Nick Bartlett

    Summarizes five major trade disputes before the World Trade Organization (WTO): (1) the Brazil-Canada aircraft dispute, (2) the European Union/United States foreign sales corporation dispute, (3) the Asian/United States shrimp and sea turtle dispute, (4) the United States/European Union beef hormones dispute, and (5) the U.S. steel tariff dispute.

    Keywords: Trade; Conflict Management; Negotiation; Brazil; Canada; European Union; Asia; United States;

    Citation:

    Moss, David A., and Nick Bartlett. "Note on WTO Disputes: Five Major Cases." Harvard Business School Background Note 703-016, September 2002. View Details
  27. Free Trade vs. Protectionism: The Great Corn-Laws Debate (Abridged)

    David A. Moss

    Examines the extended conflict between free traders and protectionists in 19th century Britain. It culminates with Prime Minister Sir Robert Peel's decision at the end of 1845 about whether to repeal the Corn Laws, a series of acts that had protected British agriculture for almost 200 years. With landowners and industrialists battling fiercely over the issues, nearly everyone agreed that the decision would be momentous.

    Keywords: Plant-Based Agribusiness; Change Management; Trade; Governing Rules, Regulations, and Reforms; Policy; Government Legislation; Market Entry and Exit; Conflict of Interests; Competitive Advantage; Agriculture and Agribusiness Industry; Great Britain;

    Citation:

    Moss, David A. "Free Trade vs. Protectionism: The Great Corn-Laws Debate (Abridged)." Harvard Business School Case 701-140, May 2001. View Details
  28. Free Trade vs. Protectionism: The Great Corn-Laws Debate

    David A. Moss, Kevin P. Brennan, Matthew B. Gorin and Marian Lee

    Examines the extended conflict between free traders and protectionists in nineteenth-century Britain. It culminates with Prime Minister Robert Peel's decision at the end of 1845 about whether to repeal the Corn Laws, a series of acts that had protected British agriculture for almost 200 years. With landowners and industrialists battling fiercely over the issues, nearly everyone agreed that the decision would be momentous.

    Keywords: Conflict of Interests; Trade; Governing Rules, Regulations, and Reforms; Policy; Government Legislation; Change Management; Competitive Advantage; Plant-Based Agribusiness; Market Entry and Exit; Agriculture and Agribusiness Industry; Great Britain;

    Citation:

    Moss, David A., Kevin P. Brennan, Matthew B. Gorin, and Marian Lee. "Free Trade vs. Protectionism: The Great Corn-Laws Debate." Harvard Business School Case 701-080, February 2001. View Details
  29. German Hyperinflation of 1923, The

    David A. Moss and Julio J. Rotemberg

    Presents a compilation of primary and secondary sources as well as a set of data exhibits on the German hyperinflation of 1923. The hyperinflation represented a defining moment in German history and certainly one of the two or three most important economic events of the 20th century. Memories of it continue to shape economic policy in Germany to this day. Equally important, the story of the world's most spectacular hyperinflation is rich in lessons about the many interconnections between money, prices, production, and politics in a modern capitalist economy.

    Keywords: History; Price; Production; Money; Inflation and Deflation; Policy; Economy; Government and Politics; Germany;

    Citation:

    Moss, David A., and Julio J. Rotemberg. "German Hyperinflation of 1923, The." Harvard Business School Case 798-048, January 1998. (Revised June 1999.) View Details
  30. French Pension System, The: On The Verge Of Retirement? (Abridged)

    David A. Moss

    Surveys the French pension system, its particular institutional characteristics, and some of the critical challenges and opportunities facing French reformers. Like almost every other industrialized country, France has a large pay-as-you-go public pension system that is beginning to run into serious financial trouble. Ever-increasing longevity, the impending retirement of the baby boomers, and intense public pressure for a lower retirement age are all placing great strain on the existing system. The case emphasizes that in contemplating proposals for reform, the French are being required to weigh two different social objectives that appear to be in conflict--economic growth and economic security. Their choices will end up exerting an enormous impact not only on their welfare state but also on the structure of French labor and capital markets.

    Keywords: Retirement; Governing Rules, Regulations, and Reforms; Policy; Economic Growth; Economics; Capital Markets; Wages; Public Administration Industry; France;

    Citation:

    Moss, David A. "French Pension System, The: On The Verge Of Retirement? (Abridged)." Harvard Business School Case 799-143, April 1999. View Details
  31. Explaining the Great Depression

    David A. Moss and Joseph P Gownder

    Although the Great Depression stands as the most punishing economic event of the 20th century, there is still remarkably little consensus about its causes. This case presents a number of prominent explanations including those of Franklin D. Roosevelt, John Maynard Keynes, Milton Friedman, and Anna Jacobson Schwartz. Four additional theories are presented in the appendix.

    Keywords: History; Financial Crisis; Theory; Economics;

    Citation:

    Moss, David A., and Joseph P Gownder. "Explaining the Great Depression." Harvard Business School Compilation 799-067, December 1998. (Revised January 1999.) View Details
  32. Origins of National Income Accounting

    David A. Moss and Joseph P Gownder

    Set in the Great Depression, this case explores the origins of national income accounting in the United States. Highlights Senator La Follette's 1932 proposal for the federal government to begin collecting national income statistics.

    Keywords: Accounting; Financial Crisis; Data and Data Sets; Mathematical Methods; United States;

    Citation:

    Moss, David A., and Joseph P Gownder. "Origins of National Income Accounting." Harvard Business School Case 799-080, December 1998. View Details
  33. Creating the International Trade Organization

    David A. Moss, George R. Appling and Andrew D Archer

    In the late 1940s, officials at the U.S. State Department began campaigning for the creation of an International Trade Organization (ITO). This new organization would oversee global negotiations on trade liberalization, foreign direct investment, cartels, and commodity agreements; and it would complement the IMF and the World Bank, both of which were founded at the Bretton Woods Conference in 1944 to address international financial flows. Together, the IMF, the World Bank, and the ITO would comprise a comprehensive system for the management of international economic affairs. As it turned out, however, the proposed ITO proved extremely controversial both within the United States and around the world. When President Truman finally sent the ITO Charter to Congress in 1949, lawmakers there had to decide whether to endorse this product of three years of intense international negotiations or simply to let it die an unceremonious death in Washington, D.C.

    Keywords: Mission and Purpose; Trade; Governing Rules, Regulations, and Reforms; Policy; Globalized Economies and Regions; Agreements and Arrangements; Foreign Direct Investment; Economic Systems; International Relations;

    Citation:

    Moss, David A., George R. Appling, and Andrew D Archer. "Creating the International Trade Organization." Harvard Business School Case 798-057, February 1998. View Details
  34. French Pension System, The: On the Verge of Retirement?

    David A. Moss, Anne Dias and Bertrand O. Stephann

    Surveys the French pension system, its particular institutional characteristics, and some of the critical challenges and opportunities facing French reformers. Like almost every other industrialized country, France has a large pay-as-you-go public pension system that is beginning to run into serious financial trouble. Ever-increasing longevity, the impending retirement of the baby boomers, and intense public pressure for a lower retirement age are all placing great strain on the existing system. The case emphasizes that in contemplating proposals for reform, the French are being required to weigh two different social objectives that appear to be in conflict--economic growth and economic security. Their choices will end up exerting an enormous impact not only on their welfare state but also on the structure of French labor and capital markets.

    Keywords: Retirement; Compensation and Benefits; Capital Markets; Economic Growth; Labor; Problems and Challenges; Opportunities; Welfare or Wellbeing; Investment; Governing Rules, Regulations, and Reforms; Public Administration Industry; France;

    Citation:

    Moss, David A., Anne Dias, and Bertrand O. Stephann. "French Pension System, The: On the Verge of Retirement?" Harvard Business School Case 798-032, September 1997. (Revised October 1997.) View Details
  35. Crisis at the Federal Reserve: Arthur Burns and the Stagflation of 1973-75

    David A. Moss and Wyatt C. Wells

    Briefly examines the history of the Federal Reserve System up through 1970 and then delves into how the central bank, under the leadership of Arthur F. Burns, responded to the "stagflation" of the early 1970s. It culminates with the Federal Reserve's response to the severe 1974-1975 recession.

    Keywords: Central Banking; Inflation and Deflation; Government Administration; Financial Crisis; United States;

    Citation:

    Moss, David A., and Wyatt C. Wells. "Crisis at the Federal Reserve: Arthur Burns and the Stagflation of 1973-75." Harvard Business School Case 797-079, January 1997. (Revised March 1997.) View Details
  36. Note on Money and Monetary Policy

    David A. Moss and Wyatt C. Wells

    Offers a brief overview of economic thinking about the nature of money and about how the central bank can affect the economy through monetary policy.

    Keywords: Sovereign Finance; Government Administration; Policy; Central Banking; Money; Inflation and Deflation; Financial Crisis;

    Citation:

    Moss, David A., and Wyatt C. Wells. "Note on Money and Monetary Policy." Harvard Business School Background Note 797-094, January 1997. (Revised March 1997.) View Details
  37. Confronting the Third Industrial Revolution

    David A. Moss

    Comprises three pieces. The first piece, which forms the body of the case, is adapted from a speech delivered by the author before the Harvard Business School Political Forum in early 1995. Originally entitled "The Economic Foundations of American Social Policy: Yesterday and Today," the speech attempts to place current discussions about a Third Industrial Revolution in historical perspective. The second piece, presented in the appendices, includes excerpts from speeches by three major policy figures--Representative Newt Gingrich, presidential candidate Patrick Buchanan, and Secretary of Labor Robert Reich. Each of these speakers identifies profound changes in the U.S. economy and suggests specific public policy responses. The 11 data exhibits that form the final piece of the case offer an overview of U.S. economic performance from 1960 to 1994. The primary theme linking these materials together is the notion that the United States is now in the midst of an economic transition. What remains uncertain, of course, is the precise nature of the transition. Is it really as profound or as far reaching as the various authors suggest?

    Keywords: Transition; Policy; Economy; Government and Politics; Society; United States;

    Citation:

    Moss, David A. "Confronting the Third Industrial Revolution." Harvard Business School Case 796-161, April 1996. View Details
  38. International Institutions

    David A. Moss, Louis T. Wells Jr. and Lakshmi Gopalan

    Describes the IMF, the World Bank Group, the regional development banks, the Bank of International Settlements, the OECD, and the Group of 7.

    Keywords: Financial Institutions; Banks and Banking; International Finance; Trade; International Relations; Banking Industry;

    Citation:

    Moss, David A., Louis T. Wells Jr., and Lakshmi Gopalan. "International Institutions." Harvard Business School Background Note 796-116, February 1996. View Details
  39. Constructing a Nation: The United States and Their Constitution, 1763-1792

    David A. Moss

    Examines the founding of the United States of America during the second half of the eighteenth century. Focuses on: 1) the reasons why the American colonists rebelled against Britain (1763-1774); 2) the problems the new nation confronted during the War of Independence and under the Articles of Confederation (1775-1788); 3) the main issues taken up at the Constitutional Convention in Philadelphia (1787); and 4) the enormous challenges facing Alexander Hamilton as Secretary of the Treasury in the first Washington Administration (1789-1792). A complete version of the Constitution (including the first 10 amendments) is attached as an appendix.

    Keywords: History; Economic Systems; Laws and Statutes; Property; Government Administration; United States;

    Citation:

    Moss, David A. "Constructing a Nation: The United States and Their Constitution, 1763-1792." Harvard Business School Case 795-063, December 1994. (Revised January 1996.) View Details
  40. Unemployment in France: "Priority Number One"

    David A. Moss

    Explores the problem of French unemployment on the eve of the presidential elections of 1995. Traces the development of social and economic policies under President Mitterrand and surveys leading explanations for the nation's mounting unemployment crisis. One major theme concerns possible contradictions between France's commitment to European integration and its commitment to expansive social protection for French citizens. Another important theme relates to the apparent tradeoff between jobs and wages, which has characterized most of the developed economies since the mid-1970s.

    Keywords: Job Cuts and Outsourcing; Employment; Economics; Government and Politics; Political Elections; Social Issues; Wages; France;

    Citation:

    Moss, David A. Unemployment in France: "Priority Number One". Harvard Business School Case 795-064, April 1995. (Revised October 1995.) View Details

Other Publications and Materials

  1. Financing Higher Education in Australia

    David Moss and Stephanie Lo

    Even before Australian lawmakers abolished university tuition in 1973, students in Australia had long benefited from low tuition and large government subsidies. By the early 1980s, however, the nation's universities faced growing budget challenges and an apparent shortage of capacity as demand for higher education surged. Policymakers, cognizant of a growing budget deficit as well as a hard-hitting recession, hesitated to provide increased funding to higher education. The debate over how best to finance Australian higher education finally came to a head in the late 1980s, following publication of the Report of the Committee on Higher Education Funding (commonly known as the Wran Report). Although the Wran Committee had considered several potential funding schemes, it ultimately proposed a radical system in which students would pay tuition financed through income-contingent loans provided by the government. The Wran Report proved to be of particular interest to the Australian Prime Minister, Robert Hawke. The government's fiscal position seemed to demand that educational financing be overhauled, but there was no consensus on how best to do this. Could the Prime Minister convince his Australian Labor Party to abandon the free-education plank in its platform? And even if he could, how could he be sure that the Wran Committee's strategy was the right one and that its recommendations were workable? Would following an American model of full tuition for higher education and government-guaranteed student loans make more sense? These were just a few of the questions that the Prime Minister confronted as he contemplated new approaches for financing higher education in Australia.

    Keywords: Higher Education; Financing and Loans; Government and Politics; Australia;

    Citation:

    Moss, David, and Stephanie Lo. "Financing Higher Education in Australia." 2009. (Draft case.) View Details
  2. Steering Monetary Policy Through Unprecedented Crises

    David Moss and Cole Bolton

    In early April 2008, economic conditions in Europe appeared to be deteriorating on almost all fronts: sales figures were falling, business and consumer confidence were slumping, forecasts for European growth were being revised downward, and inflation was rising. In fact, figures for the month of March revealed that inflation had reached an annualized rate of 3.5%, Europe's highest level since 1992. On top of these broad economic problems, the European financial sector—indeed, the financial sector worldwide—was in turmoil. By April 2008, global financial institutions had written down the value of their mortgage-related investments and other assets by at least $230 billion, and businesses around the world were complaining that it was ever more difficult to secure credit. In America, meanwhile, consumer confidence was falling, consumer spending had slowed to a near halt, and inflation had crept above 4%. In reaction to these dismal economic conditions, the Federal Reserve had steadily cut interest rates over a seven-month period, most recently lowering its key rate to 2.25% on March 18. In sharp contrast to the Fed, the European Central Bank (ECB) had long held its key rate at 4%, where it stood when the ECB's Governing Council reconvened on April 10, 2008. Given both the market turmoil and the evident inflationary pressure, members of the ECB's Governing Council would have to weigh the available data extremely carefully as they decided whether to raise, lower, or maintain their benchmark interest rate. The significance of this decision could hardly be overstated, since it had the potential to send a strong signal about the nature of European monetary policy and the priorities of the ECB going forward.

    Keywords: Financial Crisis; Inflation and Deflation; Central Banking; Interest Rates; International Finance; Policy; Crisis Management; Europe;

    Citation:

    Moss, David, and Cole Bolton. "Steering Monetary Policy Through Unprecedented Crises." 2009. (Draft case.) View Details
  3. The Pecora Hearings

    David Moss, Cole Bolton and Eugene Kintgen

    In 1932, in the depths of the Great Depression, the Senate Banking Committee began a much-publicized investigation of the nation's financial sector. The hearings, which came to be known as the Pecora hearings after the Banking Committee's lead counsel Ferdinand Pecora, revealed how the country's most respected financial institutions knowingly misled investors as to the desirability of certain securities, engaged in irresponsible investment behavior, and offered privileges to insiders not afforded to ordinary investors.  During the famous "Hundred Day" congressional session that began his presidency, Roosevelt signed two bills meant to prevent some of these abuses. The first law required companies to register new securities with the Federal Trade Commission (FTC) and to publish prospectuses with detailed information on their business ventures before they could offer new securities to the public. The second law established insurance for bank deposits and forced financial institutions to choose between investment and commercial banking.

    Roosevelt also believed that the government should play a more active role in the financial system by regulating national securities exchanges. In February 1934, the president urged Congress to enact such legislation, prompting the introduction of a bill entitled the Securities Exchange Act. If enacted, this bill would force all securities exchanges to register with the Federal Trade Commission, would curtail the size of loans that could be advanced to securities investors, and would ban a number of practices (such as short-selling) that were thought to facilitate stock manipulation. Additionally, the legislation would require that all companies with exchange-listed securities publish detailed business reports as frequently as the FTC desired and would subject any company or exchange deemed to be in violation of the act's provisions to increased legal liability.

    Wall Street, represented in particular by New York Stock Exchange (NYSE) President Richard Whitney, took a strong position against the Securities Exchange Act. Whitney was ultimately summoned to testify during the congressional hearings on the Securities Exchange Act in late February 1934. Would he be able to convince lawmakers that the Securities Exchange Act would impose overly burdensome regulations on exchanges and stifle American securities markets, or would his arguments fail to win over those who believed that strict regulations were exactly what financial markets required following the Great Crash?

    Keywords: Financial history; Financial Crisis; Financial Markets; Governing Rules, Regulations, and Reforms; Government Legislation; Laws and Statutes; Business and Government Relations; Financial Services Industry;

    Citation:

    Moss, David, Cole Bolton, and Eugene Kintgen. "The Pecora Hearings." 2009. (Draft case.) View Details
  4. Danatbank

    David Moss, Cole Bolton and Andrew Novo

    In the summer of 1931, Germany was struggling with a deepening economic crisis. Production had fallen, unemployment was high, and bank deposits and gold were being withdrawn from the country at a rapid pace, threatening the value of the German mark. The country's third largest bank, the Danatbank, was especially hard hit by the flagging economy and the flight of capital. By July, the Danatbank was on the verge of collapse, and the bank's charismatic and controversial senior partner, Jakob Goldschmidt, appealed personally to the government, the central bank, and his private banking rivals for a lifeline.

    Keywords: Financial history; Economy; Financial Crisis; Borrowing and Debt; Banks and Banking; Financing and Loans; Banking Industry; Germany;

    Citation:

    Moss, David, Cole Bolton, and Andrew Novo. "Danatbank." 2009. (Draft case.) View Details
  5. The Paranoid Style in the Study of American Politics

    David Moss and Mary Oey

    The conventional view is that political actors, like economic actors, pursue their self interest, and that special interest groups dominate the policy making process by satisfying policy makers' need for money and other forms of political support. Indeed, many scholars regard this economic theory of regulation as a general theory of politics. George Stigler himself claimed that "temporary accidents aside," exceptions "simply will not arise: our extensive experience with the general theory in economics gives us the confidence that this is so." In this paper, we suggest that exceptions—including major ones—may in fact arise. We focus on three historical cases in which special interests apparently gave way to the general interest in the policy making process: the enactment of Medicare in 1965, in which the powerful doctors' lobby failed in its bid to stop the legislation; the Voting Rights Act of 1965, which passed overwhelmingly despite the absence of any economically powerful interest group behind it; and the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund), which became law over the strenuous objections of the powerful chemical industry lobby. In all three of these cases (and especially in the latter two), the proposed legislation became unstoppable in the aftermath of a relevant horror story—e.g., Love Canal, in the case of Superfund—that received extensive coverage in the press.

    Although one could argue that we focus only on high-profile cases, and that capture theory applies more cleanly to policies that slip under the public's radar screen, we have never seen the economic theory of regulation advertised as "a theory of minor legislative events."

    Ultimately, the challenge for scholars will be to identify the conditions under which public policy is dominated (or captured) by special interests and the conditions under which it is not. Although such a task lies far beyond the scope of this paper, the three cases surveyed here suggest at least one potentially important dynamic: that in the presence of a free press, real-life horror stories with bearing on policy issues may serve to blunt the power of special interests by informing and catalyzing public opinion.

    Keywords: Policy; Government Legislation; Media; Interests; Power and Influence; Public Opinion; United States;

    Citation:

    Moss, David, and Mary Oey. "The Paranoid Style in the Study of American Politics." 2008. View Details