Media Advisory: As G-20 Meeting Looms, Presidential Transition Begins,
Carnegie Mellon Economist Available To Discuss Impact of U.S. Financial Crisis
WHO: Roberto Weber, associate professor of social and decision sciences at Carnegie Mellon University
WHAT: On Nov. 15, the leaders of the Group of 20 nations — the biggest rich economies plus selected emerging markets — will meet in Washington to address the financial crisis that is now sweeping the developing world. Roberto Weber, a professor of behavioral economics at Carnegie Mellon, can discuss how the negative effects of the U.S. financial market extend to other economies. Weber has conducted experiments that show how countries whose economies are independent of the U.S. economy can be influenced by the sense of pessimism in the U.S. market.
He says there are a few lessons learned. "The main lesson is that financial markets themselves can be part of the problem. In days like these, when everyone is constantly scrutinizing what goes on in financial markets, any bad information conveyed by those markets may have extensive and large negative effects on where the economy ends up. Moreover, even if nothing substantive in the economy has changed, financial markets can quickly lead us to some very bad outcomes simply because of their ability to communicate pessimistic beliefs and to make those beliefs self-reinforcing. These effects may be far-reaching and may spill over into other economies simply because financial markets are highly globalized and interdependent."
On the heels of the election, Weber says that the most effective way to deal with market spiral is to provide good leadership. "In order to start risking higher investment choices, people need to have confidence that others will do so as well, that is they need to believe that others have confidence. A highly visible and trusted public leader might be able to produce this confidence and the belief that others share this optimism." One thing this suggests, according to Weber, is that the people who President-elect Obama assembles as part of his economic leadership team may play a crucial role in determining the success of his economic recovery policies. "They should be people who are publicly well-known and highly trusted for their ability to lead government economic policy through these tough times."
CONTACT: Phone or live, on-camera interviews can be scheduled with Weber by calling Ken Walters at 412-268-1151 or 412-268-2900.