Find all School-related info fast with the new School-Specific MBA Forum

It is currently 22 Oct 2014, 22:48

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Defaulting western economy-Impact on B-schools.

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Manager
Manager
User avatar
Status: Its Wow or Never
Joined: 11 Dec 2009
Posts: 209
Location: India
Concentration: Technology, Strategy
GMAT 1: 670 Q47 V35
GMAT 2: 710 Q48 V40
WE: Information Technology (Computer Software)
Followers: 5

Kudos [?]: 52 [0], given: 7

Defaulting western economy-Impact on B-schools. [#permalink] New post 30 Jul 2011, 12:10
I am not much of an economist but all this saga about the US Fed Reserve running out of funds and AAA accreditation being revoked is certainly taken US by storm.
Even worse situation in Europe when countries are just lining up in the defaulters list. Greece is already there.Ireland and Poland might join in soon.
With the Western economy facing one of its toughest times , what is the impact going to be on the B-schools in those regions.US and Europe have the best B-schools in the world and surely there must be some impact.
Can the experts please shed some light on this issue. :shock:
_________________

---------------------------------------------------------------------------------------
If you think you can,you can
If you think you can't,you are right.

Kaplan Promo CodeKnewton GMAT Discount CodesGMAT Pill GMAT Discount Codes
1 KUDOS received
Intern
Intern
avatar
Joined: 30 Jul 2011
Posts: 11
Location: United States
Concentration: Finance, Economics
GMAT Date: 05-31-2024
Followers: 0

Kudos [?]: 6 [1] , given: 22

Re: Defaulting western economy-Impact on B-schools. [#permalink] New post 30 Jul 2011, 15:58
1
This post received
KUDOS
Since the government doesn't offer grants and scholarships to graduate students like it does for undergraduates, I don't think there will be much of an impact. For undergrads, cuts in government spending will result in higher tuition and there will be fewer spots---increased competition.

If you're asking how the debt crisis and an almost certain downgrade of US treasury bonds will affect the schools themselves--nobody can say because the US has never been downgraded. As Mohamed El-Erian put it, we would be in the land of uncertainty. However, I would venture to guess that a downgrade from AAA to AA would cause a spike in interest rates (~50-100 basis points) and people, corporations, organizations, and institutions like universities can lose a lot of paper wealth. Hence, I can see a downgrade indirectly affecting university research, rankings, and admissions by diminishing the value of university endowments.
Manager
Manager
User avatar
Status: Its Wow or Never
Joined: 11 Dec 2009
Posts: 209
Location: India
Concentration: Technology, Strategy
GMAT 1: 670 Q47 V35
GMAT 2: 710 Q48 V40
WE: Information Technology (Computer Software)
Followers: 5

Kudos [?]: 52 [0], given: 7

Re: Defaulting western economy-Impact on B-schools. [#permalink] New post 31 Jul 2011, 10:37
mbasile wrote:
Since the government doesn't offer grants and scholarships to graduate students like it does for undergraduates, I don't think there will be much of an impact. For undergrads, cuts in government spending will result in higher tuition and there will be fewer spots---increased competition.

If you're asking how the debt crisis and an almost certain downgrade of US treasury bonds will affect the schools themselves--nobody can say because the US has never been downgraded. As Mohamed El-Erian put it, we would be in the land of uncertainty. However, I would venture to guess that a downgrade from AAA to AA would cause a spike in interest rates (~50-100 basis points) and people, corporations, organizations, and institutions like universities can lose a lot of paper wealth. Hence, I can see a downgrade indirectly affecting university research, rankings, and admissions by diminishing the value of university endowments.

Will the default not affect the economy in a similar way the 2008 recession did? Will it not affect the companies recruiting patterns considering their business in the US might be affected?
I mean since the 2008 recession did not affect the Univ grants etc (At least i think it did not,please correct me if i am wrong) , the downturn still affected companies' recruiting patterns around the world.So many views for this post and ust one reply.Am i just being paranoid or people do not know how will it affect everyone?
_________________

---------------------------------------------------------------------------------------
If you think you can,you can
If you think you can't,you are right.

Intern
Intern
avatar
Joined: 30 Jul 2011
Posts: 11
Location: United States
Concentration: Finance, Economics
GMAT Date: 05-31-2024
Followers: 0

Kudos [?]: 6 [0], given: 22

Re: Defaulting western economy-Impact on B-schools. [#permalink] New post 31 Jul 2011, 14:02
mojorising800 wrote:
mbasile wrote:
Since the government doesn't offer grants and scholarships to graduate students like it does for undergraduates, I don't think there will be much of an impact. For undergrads, cuts in government spending will result in higher tuition and there will be fewer spots---increased competition.

If you're asking how the debt crisis and an almost certain downgrade of US treasury bonds will affect the schools themselves--nobody can say because the US has never been downgraded. As Mohamed El-Erian put it, we would be in the land of uncertainty. However, I would venture to guess that a downgrade from AAA to AA would cause a spike in interest rates (~50-100 basis points) and people, corporations, organizations, and institutions like universities can lose a lot of paper wealth. Hence, I can see a downgrade indirectly affecting university research, rankings, and admissions by diminishing the value of university endowments.

Will the default not affect the economy in a similar way the 2008 recession did? Will it not affect the companies recruiting patterns considering their business in the US might be affected?
I mean since the 2008 recession did not affect the Univ grants etc (At least i think it did not,please correct me if i am wrong) , the downturn still affected companies' recruiting patterns around the world.So many views for this post and ust one reply.Am i just being paranoid or people do not know how will it affect everyone?


If you want just one reply, this is what will happen:

The US will not default. Republicans and Democrats will strike a deal in the next 30 hours and we will avoid default. There will be no recession comparable to the financial crisis of 2008. However, US debentures will be downgraded from AAA to AA. The rise in interest rates will be minor but, would slow down the economic recovery. I don't think we would see huge changes in hiring trends.
Senior Manager
Senior Manager
User avatar
Joined: 01 Feb 2007
Posts: 467
Location: Silicon Valley via Russia, China, Canada and Wharton/Lauder
Schools: Wharton/Lauder (Mandarin Chinese)
Followers: 10

Kudos [?]: 52 [0], given: 8

Re: Defaulting western economy-Impact on B-schools. [#permalink] New post 31 Jul 2011, 23:40
mojorising800 wrote:
With the Western economy facing one of its toughest times , what is the impact going to be on the B-schools in those regions.US and Europe have the best B-schools in the world and surely there must be some impact.
Can the experts please shed some light on this issue. :shock:

I am not an expert on impacts of crises on b-schools. However, I have witnessed first hand how the most profound crisis in modern financial history influenced my school. From the admissions point of view, the number of applicants to Wharton in exploded, and competition intensified a whole lot. From the academic point of view, the school was quick to react and introduced new courses focused on the crisis, then it went on to overhaul the curriculum. Result: it is still a very cool school, and it is still hard to get in. :wink:
_________________

Rukuku.com–Interactive Online Courses
http://www.rukuku.com

Wharton/Lauder blog
http://www.onefootprint.com/lauderwharton/

Get the best GMAT Prep Resources with GMAT Club Premium Membership

Manager
Manager
avatar
Status: Taking heavily leveraged but calculated risks at all times
Joined: 04 Apr 2010
Posts: 185
Concentration: Entrepreneurship, Finance
Schools: HBS '15, Stanford '15
GMAT Date: 01-31-2012
Followers: 1

Kudos [?]: 29 [0], given: 12

Re: Defaulting western economy-Impact on B-schools. [#permalink] New post 01 Aug 2011, 08:45
All said and done. US should be in a good place by 2014 right? Right?
Re: Defaulting western economy-Impact on B-schools.   [#permalink] 01 Aug 2011, 08:45
    Similar topics Author Replies Last post
Similar
Topics:
Can I ask for interest on defaulted student loans when I fil ajshco 0 23 Jan 2013, 05:22
3 Experts publish their posts in the topic Love it: Mortgage Banker Association Defaults on their Loan bb 0 17 Apr 2011, 19:23
Probability of Bond default ywilfred 7 25 Aug 2009, 07:16
BSchools étudiant 4 08 Feb 2005, 11:16
Case Western Reserve (Weatherhead) Hjort 3 19 Jan 2005, 17:59
Display posts from previous: Sort by

Defaulting western economy-Impact on B-schools.

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.