We Need a ‘Shove’ Toward Better Financial Health

Economists who study financial markets — usually called finance professors at business schools and financial economists or just economists elsewhere — have had more impact on the world than your average professors. The rise of funds tracking indexes is perhaps the biggest change that can be ascribed to their work, but modern corporate finance, derivatives markets and most non-passive portfolio management are all conducted, at least partly, in accordance with ideas first floated decades earlier in finance and economics journals.

So when two prominent financial economists, very much in the mainstream of their discipline, propose that governments should forcefully shove people in the direction of smarter financial choices, as John Campbell and Tarun Ramadorai are currently doing, it’s worth paying attention even in this anti-regulatory moment.