We propose a novel theory and supporting empirical evidence that lower long term interest rates (e.g., due to “quantitative easing”) can harm informational and allocative efficiency. We develop a rational expectations equilibrium model in which the interest rate is determined endogenously and utilized by investors to update their beliefs. Interest…

cross-asset-information-synergy_BAI Title: Cross-Asset Information Synergy in Mutual Fund Families  

How have passive managers fared in the era of the dramatic rise of passive investing? DGT Passive management 10-17-20

Corporate governance in the presence of active and passive delegated investment - CMM

ESG_paper_HWY36-UVA-Feb-2021

Social Proximity to Capital: Implications for Investors and Firms Theresa Kuchler, Yan Li, Lin Peng, Johannes Stroebel, Dexin Zhou Abstract We show that institutional investors are more likely to invest in firms from regions to which they have stronger social ties but find no evidence that these investments earn a…

Consumption out of Fictitious Capital Gains and Selective Inattention Benjamin Loos, Steffen Meyer, and Michaela Pagel Abstract Do retail investors’ behavioral biases in trading directly affect their consumption out of stock market wealth? We exploit a natural experiment that changed the displayed purchase prices in investors’ online portfolios. Investors are…