Jump to ContentJump to Main Navigation
After the FloodHow the Great Recession Changed Economic Thought$
Users without a subscription are not able to see the full content.

Edward L. Glaeser, Tano Santos, and E. Glen Weyl

Print publication date: 2017

Print ISBN-13: 9780226443546

Published to Chicago Scholarship Online: September 2017

DOI: 10.7208/chicago/9780226443683.001.0001

Show Summary Details
Page of

PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 06 March 2021

Finance and the Common Good

Finance and the Common Good

(p.277) Chapter Nine Finance and the Common Good
After the Flood

E. Glen Weyl

University of Chicago Press

I document empirically that the field of financial economics has been mostly concerned with positive issues (largely related to “informational efficiency” of prices) rather than allocative efficiency relative to the field of industrial organization, which I take as a comparison point. I argue these divergent paths are partly driven by financial incentives. The strength of regulation in competition policy and its reliance on economic evidence stimulated, through demand for teaching and consulting services, extensive work on welfare in industrial organization. The weakness and lack of economic rigor in financial regulation helped stimulate the rise of quantitative arbitrage strategies that demanded teaching and consulting services from economists, leading to extensive work on predicting the paths of asset prices or showing these cannot be predicted. I provide some weak suggestive empirical evidence consistent with this hypothesis and discuss prospects for these underlying conditions changing. I conclude with a discussion of how the works in this volume and the work of José Scheinkman in whose honor this volume was written might contribute to this shift.

Keywords:   consulting, normative economics, finance, industrial organization, positive economics

Chicago Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.