Economists’ Hubris - The Case of Award Winning Finance Literature
Ernst & Young LLP
Contango Capital Advisors
November 30, 2010
Journal of Financial Transformation, Vol. 31, pp 9-17, March 2011
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 are unlikely to help financial executives improve the way they evaluate risk or manage either risk or their institutions. Finance academics appear to live in a parallel universe, completely oblivious to the nature of the financial services sector that they purport to study. Some of the papers do challenge long-held beliefs, which is very encouraging, but academics still need to go much further than that to write articles that are of any practical value.
Number of Pages in PDF File: 10
Keywords: Academic Finance, Financial Institutions, Efficient Market Hypothesis, Applied Finance, Economic Literature, Quantitative Finance
JEL Classification: G1, G2, G14, A2, C0Accepted Paper Series
Date posted: December 1, 2010 ; Last revised: May 15, 2012
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