Equity returns are not very predictable despite the presence of many well-documented behavioral biases and risk factors. Why? We collect a comprehensive global dataset covering over 24,000 tradable equities and representing more than 99.9% of the market cap on developed exchanges. Analyzing...

Standard economic theories have severe difficulties in simultaneously explaining a number of key aggregate empirical facts: i) there are substantial differences in capital-labor ratios across time ii) despite continuously increasing capital-labor ratios, both factors still earn non-negligible...

To rationalize a substantial income share of labor despite progressive task automation over the centuries, we present a simple model in which demand moves along a vertically differentiated production structure toward goods of increasing sophistication. Automation of more sophisticated goods...

There are many well documented behavioral biases in financial markets. Yet, analyzing U.S. equities reveals that less than 1.21% of returns are predictable in recent years. Given the high number of biases, why are returns not more predictable? We provide two pieces of new evidence for one...