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Economists’ Hubris – The Case of Award Winning Finance Literature

Author

Listed:
  • Shahin Shojai

    (Capco)

  • George Feiger

    (Contango Capital Advisors)

Abstract

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 longheld beliefs, which is very encouraging, but academics still need to go much further than that to write articles that are of any practical value.

Suggested Citation

  • Shahin Shojai & George Feiger, 2011. "Economists’ Hubris – The Case of Award Winning Finance Literature," Journal of Financial Transformation, Capco Institute, vol. 31, pages 9-17.
    • Handle: RePEc:ris:jofitr:1443
    as

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    References listed on IDEAS

    as
    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    2. David Hand & Keming Yu, 2009. "Justifying adverse actions with new scorecard technologies," Journal of Financial Transformation, Capco Institute, vol. 26, pages 13-17.
    3. Shahin Shojai, 2009. "Economists' Hubris - The Case of Mergers and Acquisitions," Journal of Financial Transformation, Capco Institute, vol. 26, pages 4-12.
    4. Shahin Shojai & George Feiger, 2009. "Economists’ hubris – the case of asset pricing," Journal of Financial Transformation, Capco Institute, vol. 27, pages 9-13.
    5. repec:rnp:ecopol:09111 is not listed on IDEAS
    6. Frank Fabozzi & Vinod Kothari, 2007. "Securitization: The Tool of Financial Transformation," Yale School of Management Working Papers amz2495, Yale School of Management, revised 01 Jul 2007.
    7. Keith Kuester & Stefan Mittnik & Marc S. Paolella, 2006. "Value-at-Risk Prediction: A Comparison of Alternative Strategies," Journal of Financial Econometrics, Oxford University Press, vol. 4(1), pages 53-89.
    8. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    9. Boudoukh, Jacob, et al, 1997. "Pricing Mortgage-Backed Securities in a Multifactor Interest Rate Environment: A Multivariate Density Estimation Approach," The Review of Financial Studies, Society for Financial Studies, vol. 10(2), pages 405-446.
    10. Greg Hunter, 2009. "Anatomy of the 2008 financial crisis: an economic analysis postmortem," Journal of Financial Transformation, Capco Institute, vol. 27, pages 45-48.
    11. Benjamin J. Keys & Tanmoy Mukherjee & Amit Seru & Vikrant Vig, 2010. "Did Securitization Lead to Lax Screening? Evidence from Subprime Loans," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 307-362.
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    More about this item

    Keywords

    Academic Finance; Financial Institutions; Efficient Market Hypothesis; Applied Finance; Economic Lit;
    All these keywords.

    JEL classification:

    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • C00 - Mathematical and Quantitative Methods - - General - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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