The effect of professionalism on investment decisions has been found to be ambiguous. If professional investors exhibit typical portfolio biases of laymen, however, financial markets can hardly be efficient. An examination of this important question...

We analyze optimal monetary policy in a small open economy characterized by home bias in consumption. Peculiar to our framework is the application of a Ramsey-type analysis to a model of the recent open-economy New Keynesian literature. We show that...

We analyze foreigners' and domestic institutional investors' positions in U.S. equities. Controlling for many factors, we uncover a common preference for large firms and firms that are diversified internationally. The domestic preference for...

National sentiment can have major implications for individual consumption and investment choices but has been little researched by economists. This paper studies how national sentiment in the form of a perception or loyalty bias of bettors may affect...