In this fifth article in the Economists’ Hubris series, we investigate the practical applications of eight papers that won best-article awards in 2008 and 2009 from the Journal of Finance or the Journal of Financial Economics, the two leading journals in finance. We find that these articles...

In this, the third paper in the Economists’ Hubris series, we highlight the shortcomings of academic thought in developing models that can be used by financial institutions to institute effective enterprise-wide risk management systems and policies. We find that pretty much all of the models...

Hedge funds have become the darling of investors due to their presumed capacity to make money under all market conditions. Some are certainly worth investing in, and can augment a portfolio in very attractive ways. At the same time, they carry not only more but quite different risks than do...

This is the second in a series of articles that examines the practical applications of economic thought. Its focus is on the most fundamental aspects of finance theory, namely asset pricing. We discuss the major pricing models developed during the past five decades and critically examine their...

In this, the fourth article in the economists’ hubris paper series, we look at the contributions of academic thought to the field of asset management. We find that while the theoretical aspects of the modern portfolio theory are valuable, they offer little insight into how the asset management...

This paper seeks to identify why stock prices behave the way they do. We find that conventional economic theories are unable to explain why there are so many long bull and bear markets. We suggest that it is investor expectations of future market movements, based on their views of other...

This short piece discusses the risks currently inherent within both European and U.S. pension markets and provides prescriptive suggestions as to how they could be alleviated. It further highlights the potential opportunities the solutions currently being considered to solve this problem could...

In this paper, we review the historical reasons behind the success of Swiss private banks and discuss whether they possess the attributes necessary to be successful in the future. We suggest that although Swiss banquiers are well positioned to retain their global supremacy, they do need to make...

The world of private banking is undergoing tremendous change. Regulatory pressures combined with intensive competition are forcing the world's oldest and most respected banks, the Swiss banquiers, to look beyond their national borders and concentrate on exporting their domestic success into the...