The extra margin is well named because there’s real value for a firm in being able to choose when to invest. Able to pick its moment, the firm can go ahead with an investment project when there’s good news about future returns – and, equally, avoid committing itself when there’s a risk the investment will make a loss. 3  Abel (1983) points out that, for given capital, a firm’s profits are a convex function of the price of its product: they rise more in response to a given increase in the price than they decline as a result of the same-sized fall. This means that uncertainty about future prices actually raises expected profits, and therefore the incentive to invest. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  In fact, it turns out that these downside risks are the more important determinant of the decision. The reason is that, as long as it doesn’t take long to implement an investment, the firm can always respond to good news as and when it comes through. It has the same exposure to upside risks whether it invests in advance of good news or in response to it. What it can’t do, however, is to undo an investment it’s already made if it subsequently gets bad news about future returns. The real value of waiting is that, if things do take a turn for the worse, the firm will have avoided the resulting losses.
John C Williams: Diversity and inclusion - we are not where we need to be Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the OPEN Finance Forum, New York City, 25 June 2019. * * * As prepared for delivery Good morning. I’m an economist, so I’m going to start with some numbers. The unemployment rate for lesbian, gay, bisexual, and transgender people is nearly double the national average.1 And the unemployment rate specifically for transgender people is three times the national rate.2 As President of a Federal Reserve Bank, I am focused on two vital economic goals: maximum employment and stable prices for the U.S. economy. These statistics paint a clear picture of why conferences like this one are so important: We are not where we need to be. Before I go any further, I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee or others in the Federal Reserve System. Let me say, as an ally, that it’s a genuine honor to be invited to open today’s Forum. This Pride Month marks 50 years since the Stonewall uprising. We’ve come a long way since the 1960s, but we still have far to go. It was also a great honor to be able to fly the Pride flag outside the Federal Reserve Bank of New York for the first time this June.