Trust in money managers increases investors’ appetite for risk.
If you ask critics of today’s US financial sector why it got so big, they might say “greed.” But research by Chicago Booth’s Robert W. Vishny, Universita Bocconi’s Nicola Gennaioli, and Harvard’s Andrei Shleifer suggests a better answer would be “trust.” The researchers postulate that many people, lacking the skills and knowledge to invest on their own, hire money managers they trust, which reduces their anxiety about taking investment risks. That would explain why stock-market participation in the United States has been rising, and the share of riskier assets in financial portfolios has been growing.
GPT-4 Turbo outperformed professional analysts in predicting the direction of companies’ future earnings.
AI Is Ready for a Bigger Role in Financial Analysis
While consumers are a little hazy about overall inflation, asking them about prices for individual categories yields more realistic forecasts.
People Can Forecast Price Rises—If Asked the Right Questions
A panel of economists considers the currency's impact after a quarter century.
Has the Euro Been a Success?Your Privacy
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