Michael Green, Chief Strategist at Simplify Asset Management joins Pierre Daillie and Adam Butler for a revealing conversation about his thesis that stock markets are less efficient and more 'inelastic' because of the proliferation of passive index investing over the last few decades, and what that means. His thesis and research, now corroborated and examined by academic studies, labelling it as the 'Inelastic Market Hypothesis,' by Xavier Gabaix and Ralph Koijen, Jean-Philippe Bouchaud, and Valentin Haddad, shine a bright new light on how and why markets are displaying increasingly violent and rapid bouts of volatility, that may intensify over the coming years and decades.
Listen on The Move
Research mentioned in the conversation:
In Search of the Origins of Financial Fluctuations: The Inelastic Markets Hypothesis (Gabaix and Koijen)
The Inelastic Market Hypothesis: A Microstructural Interpretation (JP Bouchaud)
How Competitive is the Stock Market? (Valentin Haddad)
Where to find Michael Green:
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