The point of this short paper is to argue that any discussion of energy and climate policy should begin with a clear presentation of the basic arithmetic of energy transition. The basic arithmetic highlights the fact that the numbers must add up – projected energy consumption must equal future...

Americans now hold over $1 trillion in cryptocurrencies. Has $1 trillion in wealth been created? From the standpoint of economic theory, the answers is no. The wealth of a society consists of its real assets that produce consumable goods and services. Unless a cryptocurrency provides some type...

The correlation between stock characteristics and the cross-section of stock returns plays a central role in empirical implementations of modern asset pricing models and has important implications for investment management. This remains true whether the correlation is due to investor preferences...

In the last decade, companies have come under pressure to be socially conscious and environmentally responsible, with the pressure coming sometimes from politicians, regulators and interest groups, and sometimes from investors. The argument that corporate managers should replace their singular...

On Christmas Eve 2019 the MIT Technology Review published an article entitled, The 2010s were another lost decade on climate change. On New Year's Day the Washington Post published a longer article with the same title. Both pieces told basically the same story, one repeated by many...

Chinese fund manager performance is interesting because in a market dominated by speculative retail trading, we expect professional fund managers to have persistent edge. Using data on the Chinese mutual fund industry, the authors compute a new skill measure to identify exceptional funds with...

Sentiment based mispricing of a common stock can be interpreted as a subsidy that reduces the cost of capital. The subsidy is provided by the investors who are willing to accept a lower return than the “true” cost capital. In the case of Tesla, I estimate the subsidy to be 248 basis points....

The concept of market efficiency has been adopted by courts in a variety of contexts. In reality, markets can never be perfectly efficient or inefficient, but exist somewhere in between depending on the facts and circumstances. Courts, therefore, face a problem in deciding how efficient is...

There are two primary factors that can affect expected returns for ESG companies with high ratings – investor preferences and risk. While it is true that investor preferences for highly rated ESG companies can lower the cost of capital and, thereby, increase the value of those companies, the...

We begin by identifying the four major obstacles for financing the transition to a sustainable energy world: the immense size of the required financing, the need to coordinate investments in dozens of interrelated projects required for an orderly transition, the need to get the investment...