Financial shocks and worry about the future

Using data from the Health and Retirement Study and the Survey of Consumer Finances, we show that households that experience adverse financial shocks worry more about the adequacy of their financial resources in retirement, even after controlling for the effects of these shocks on overall wealth. We find supporting evidence that suggests that at least part of the increased worry about retirement is due to general pessimism rather than changes in an individual’s own circumstances. Specifically, experiencing idiosyncratic financial shocks is also associated with greater pessimism about the general future of the economy.      

Dumb money: Mutual fund flows and the cross-section of stock returns

We use mutual fund flows as a measure of individual investor sentiment for different stocks, and find that high sentiment predicts low future returns. Fund flows are dumb money–by reallocating across different mutual funds, retail investors reduce their wealth in the long run. This dumb money effect is related to the value effect: high sentiment stocks tend to be growth stocks. High sentiment also is associated with high corporate issuance, interpretable as companies increasing the supply of shares in response to investor demand.     

Corporate social reporting and stakeholder accountability: The missing link

Recent years have witnessed a significant degree of administrative reform, in terms of the increasing number of major companies proclaiming their social responsibility credentials, and backing up their claims by producing substantial environmental, social and sustainability reports. The paper critically evaluates the degree of institutional reform, designed to empower stakeholders, and thereby enhance corporate accountability, accompanying these voluntary initiatives, together with that potentially ensuing from proposed regulations, later rescinded, for mandatory publication of an Operating and Financial Review by UK quoted companies. It is concluded that both forms of disclosure offer little in the way of opportunity for facilitating action on the part of organizational stakeholders, and cannot therefore be viewed as exercises in accountability.     

General-to-Specific Modelling Using PcGets

Abstract.  This review examines the facilities provided by PcGets version 1.0, an OxMetrics module designed to implement automated general-to-specific model selection in the context of cross-section or dynamic time-series models that are linear in the parameters. A cross-section empirical example is used to illustrate the steps involved, the output produced and the options available for modellers.