This short paper shows how excess global saving led to asset price inflation in U.S. stocks during 1981 to 2019. It compares stock PE ratios to corporate bond values to explain that investor exuberance for stocks enabled and enhanced the extent of the secular stock rise

In this paper we investigate the importance of acquaintance networks for financial decisions by households. We construct a variable capturing the expected proximity or social closeness to a subpopulation of financially savvy people using an overdispersed Poisson model. This measure captures the...

Anecdotal evidence suggests that investor protection affects the demand for equity, but existing theories emphasize only the effect of investor protection on the supply of equity. We build a model showing that the demand for equity is important in explaining financial development. If the level...

It is a universally accepted principle that risk and return of investing are commensurate. However, people give more importance to return and risk takes a back seat. This study is an attempt to understand the perceptions of 120 investors in Gandhinagar region towards risk and return of investing...

We use proprietary brokerage data to study trading patterns within a well-known financial market bubble: that in the Chinese warrants market. Persistently successful investors traded very actively and exhibited characteristics of de facto market makers. Unskilled investors unprofitably...

In this paper, we empirically investigate warrant price behavior in the Chinese market – the largest warrant market in the world in terms of trading volume since 2006. By examining warrant return properties, volatility behavior, and pricing errors, we document a stylized fact that call...