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The Finance Blog.
Johan HombertProfessor of Finance, HEC Paris
- Economics & Finance · February 9, 2025 · 2 min readMaking DeepSeek Speak About TiananmenIn the USSR, people used the word 'crocodile' to refer to the KBG and avoid censorship. This old trick works nicely with conversational agents.
- Economics & Finance · January 8, 2023 · 2 min readChatGPT Takes My Finance ExamLike many instructors these days, I am wondering if I should try to prevent my students from using AI to solve their assignments and exams.
- Economics & Finance · October 2, 2021 · 2 min readShould You Buy Stocks When You Are Young?One of the key insights of finance theory is that you should invest your savings in a portfolio containing the market portfolio of risky assets (such as stocks) and the risk-free asset (such as…
- Economics & Finance · April 25, 2021 · 3 min readPrivacy As A Public GoodLast week’s post discussed the privacy paradox, which is the fact that many people voice concerns about the lack of online privacy but widely share personal data on the internet and when using…
- Economics & Finance · April 18, 2021 · 3 min readWhy Do We Share Our Personal Data? The Privacy ParadoxThe business model of many tech companies is based on collecting and using data about their customers.
- Economics & Finance · April 10, 2021 · 3 min readDo Stock Prices Affect Corporate Investment?A central function of financial markets is to produce information about companies. A high stock price reflects that a company has good products and is using the right set of technologies.
- Economics & Finance · April 5, 2021 · 5 min readDoes Artificial Intelligence Make Financial Markets More Informative?Artificial Intelligence (AI) and the exponential growth of data is transforming the way investors value companies.
- Economics & Finance · February 5, 2021 · 3 min readHow Much Money Retail Traders LoseZero-commission trading apps make trading accessible to everyone. As California-based brokerage firm Robinhood puts it, they are "on a mission to democratize finance for all."
- Economics & Finance · January 11, 2021 · 3 min readBelief Formation In The Stock MarketIn the previous post, we uncovered that the stock market can be predicted to a certain extent. Namely, the price-earnings (P/E) ratio forecasts future stock market returns.
- Economics & Finance · November 21, 2020 · 4 min readIs The Stock Market Predictable?The efficient market hypothesis posits that companies' stock prices reflect fundamental values at all time.
- Economics & Finance · October 25, 2020 · 3 min readCAPM (Mis)valuation In Mergers & AcquisitionsWe saw in the previous post that there is a discrepancy between CAPM-implied and actual stock returns.
- Economics & Finance · October 10, 2020 · 3 min readIs The CAPM Fake News?Corporations and non-profit organizations routinely make capital budgeting decisions: whether to build a new infrastructure, develop a green technology, launch a new business line, or acquire a…
- Economics & Finance · October 5, 2020 · 2 min readShould France Privatize Its Airports?Aéroports de Paris which owns and manages Parisian international airports Charles de Gaulle and Orly is majority-owned by the French State.
- Economics & Finance · September 29, 2020 · 1 min readIs The Stock Market Over-Exposed To The Tech Giants?The five tech giants Apple, Microsoft, Amazon, Google and Facebook now account for more than 20% of the entire US stock market capitalization.
- Economics & Finance · June 8, 2020 · 3 min readShould The EU Issue Perpetual Bonds?The idea of issuing perpetual debt to combat the Covid crisis has recently been floated by prominent public figures such as hedge fund manager George Soros (The EU Should Issue Perpetual Bonds)…
- Economics & Finance · May 12, 2020 · 2 min readCan Social Objectives Be Financed By Money Creation?Can states finance social objectives such as the energy transition, developing a coronavirus vaccine or reducing poverty, by creating money?
- Economics & Finance · April 24, 2020 · 3 min readWere Stock Prices Too High Before Covid-19?The arrival of Covid-19 in Europe made stock markets crash. The two graphs below show that the S&P 500 (the US stock market index) and the EuroStoxx 50 (the European index) went down by about 30%…