A Ricardo Research Perspective Passive investing has become one of the defining forces in global capital markets. In this paper, co-authored by our director Professor Dimitri Vayanos, together with Hao Jiang and Lu Zheng, the authors uncover a powerful and structural mechanism through which passive flows reshape asset prices. Their central finding is clear: as passive investing grows, it disproportionately… Read more »
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Many of the problems of present-day finance have their origins in the horizons set along the investment chain. The key players in this chain are the giant pension, sovereign wealth and endowment funds who appoint external asset managers, who in turn invest in companies. If these funds invest with their eyes set partially or largely on the short term, it sends a clear message down the line and embeds similar standards throughout the capitalist system.
Tell Me MoreThe finance sector is widely recognised as an originator of periodic crises. What is less widely discussed is the unhelpful role that the finance sector can play in amplifying crises that emerge from entirely non-financial origins.
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