INSIGHTS:
Corporate Actions as Moral Issues
First Published: 30 October 2026 | DOI: 10.1002/jfi2.70001
Zwetelina Iliewa, Elisabeth Kempf, Oliver Spalt
We examine nonpecuniary preferences across a broad set of corporate actions using a representative sample of the U.S. population. Our core findings, based on large-scale online surveys, are that (i) self-reported nonpecuniary concerns are large both for stock market investors and non-investors; (ii) concerns about the treatment of workers and CEO pay rank highest—higher than concerns about workforce diversity and fossil energy usage; (iii) Moral Foundations Theory emerges as an important framework for explaining nonpecuniary preferences. Combined, our findings provide new evidence on the importance of moral values as a key determinant of nonpecuniary preferences over corporate actions.
Most Claimed Statistical Findings in Cross-Sectional Return Predictability Are Likely True
First Published: 30 October 2026 | DOI: 10.1002/jfi2.70002
Andrew Y. Chen
The false discovery rate (FDR) measures the share of false positives in a set of statistical tests. I develop simple and intuitive bounds on the FDR in cross-sectional predictability publications. The simplest bound requires just a few lines of math and finds FDR ≤ 25% based on summary statistics in eight out of nine previous studies. A more refined bound finds FDR ≤ 9%. The FDR is small because randomly selecting accounting ratios produces statistically significant predictability far more often than would occur if there were no predictability. The bounds also reconcile the disparate FDR estimates in the literature.
Is That a $100 Bill on the Sidewalk?
First Published: 30 October 2026 | DOI: 10.1002/jfi2.70003
Philip Bond
I analyze a setting in which investors sequentially encounter a potentially profitable investment opportunity, and decide both whether to investigate its quality and whether to exploit the opportunity. Once exploited, the opportunity is unavailable to future investors. The key friction is that an investor observes only whether the opportunity remains available, but is ignorant about the number of investors who have already investigated the opportunity. The probability that the opportunity is exploited decreases in the number of investors. Safe opportunities are exploited more often than risky ones, even controlling for average profitability. Higher exploitation probabilities are generally associated with lower observed Sharpe ratios.
Artificial Intelligence, Productivity, and the Workforce: Evidence From Corporate Executives
First Published: 30 October 2026 | DOI: 10.1002/jfi2.70004
Salomé Baslandze, Zachary Edwards, John R. Graham, Ty McClure, Michael Sparks, Brent Meyer, Sonya Ravindranath Waddell, Daniel Weitz
We survey 734 executives to study how artificial intelligence (AI) affects productivity and labor. AI adoption is widespread but shallow at most firms, mostly focused on subscriptions. For workforce, companies on net anticipate small near-term AI-driven aggregate employment declines: larger (smaller) companies expect to reduce (increase) routine clerical (technical) positions more. Labor productivity gains are driven mainly by innovation- and demand-oriented channels. Like with past general-purpose technologies, we document a productivity paradox, likely reflecting a delay in revenue realizations. Unlike earlier technology waves, however, the typical firm exhibits little capital deepening, an indication that AI adoption mostly involves renting intangible capital.
First Published: 30 October 2026 | DOI: 10.1002/jfi2.70005
Constantinos Antoniou, Cary Frydman, Mete Kilic
A vibrant literature in finance seeks to understand whether subjective expectations exhibit underreaction or overreaction. This literature has focused almost exclusively on characteristics of firms (in the field) or artificial assets (in the lab). We argue that the literature has neglected a substantial source of variation in over and underreaction: forecaster characteristics. Using IBES data, we show that forecaster heterogeneity explains roughly the same amount of variation in over and underreaction as firm heterogeneity. We obtain a similar result using existing laboratory data. Our results suggest that the search for drivers of over and underreaction needs to include forecaster characteristics.
A Simple Framework for MPCs and MPXs
First Published: 30 October 2026 | DOI: 10.1002/jfi2.70006
Peter Maxted, David Laibson, Benjamin Moll
Standard consumption models assume a notional consumption flow that does not distinguish between nondurable and durable consumption. Such notional-consumption models generate notional marginal propensities to consume (MPC). By contrast, empirical work and policy discussions often highlight marginal propensities for expenditure (MPX), which incorporate spending on durables. We compare the notional-consumption model to an isomorphic model with frictionless durables, and map notional MPCs into MPXs.
First Published: 30 October 2026 | DOI: 10.1002/jfi2.70007
Tobias J. Moskowitz, Robert F. Stambaugh
We introduce a test of whether a given pricing model can be the model that would price assets if the market were efficient. The latter model is the benchmark for gauging inefficiency in the actual market. Our test asks whether a model assigns zero alpha to a strategy that uses only decade-old information, which even an inefficient market should price correctly. Persistence in the strategy’s factor exposures gives the test power. The CAPM passes our test, but prominent multifactor models do not.
Monetary Policy and the Secular Decline in Long-Term Interest Rates: A Global Perspective
First Published: 30 October 2026 | DOI: 10.1002/jfi2.70008
Boris Hofmann, Zehao Li, Steve Pak Yeung Wu
We document that changes in yields during the three-day windows around U.S. monetary policy announcements account for roughly 70% of the secular decline in yields across G10 currencies since the 1990s. Announcements by other central banks have no comparable effects on domestic or foreign long-term rates. The global decline reflects cumulative falls in U.S. yields and yield comovement within FOMC windows. We also find a cumulative U.S. dollar depreciation during these windows. This depreciation is associated with declines in the U.S. Treasury convenience yield even though global yield spreads relative to U.S. benchmarks remain stable.