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| Finance vs. Wal-Mart: Why are Financial Services so Expensive? |
"In the absence of evidence that increased trading led to either better prices or better risk sharing, we would have to conclude that the finance industry's share of GDP is about 2 percentage points higher than it needs to be and this would represent an annual misallocation of resources of about $280 billions for the U.S. "
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Abstract.
Despite its fast computers and credit derivatives, the current financial system does not seem better at transferring funds from savers to borrowers than the financial system of 1910.
Read the full paper from the Russell Sage Foundation
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-Thomas Philippon, New York University
05.02.2019
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Themes
Asia
Bonds
Bubbles and Crashes
Business Cycles
Central Banks
China
Commodities
Contrarian
Corporates
Creative Destruction
Credit Crunch
Currencies
Current Account
Deflation
Depression
Equity
Europe
Financial Crisis
Fiscal Policy
Germany
Gloom and Doom
Gold
Government Debt
Historical Patterns
Household Debt
Inflation
Interest Rates
Japan
Market Timing
Misperceptions
Monetary Policy
Oil
Panics
Permabears
PIIGS
Predictions
Productivity
Real Estate
Seasonality
Sovereign Bonds
Systemic Risk
Switzerland
Tail Risk
Technology
Tipping Point
Trade Balance
U.S.A.
Uncertainty
Valuations
Yield
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