Beliefs about how inflation impacts asset returns vary widely across investors, who are often overly optimistic. Information about past returns during periods of high inflation causes investors to update their beliefs, which feeds into their return expectations and subsequent trading behavior.

Surprise changes in US monetary policy rates directly affect asset prices, with a 100-basis point surprise cut resulting in a 30-basis point increase in the ratio of stock prices over 5 days; this effect grows after the initial announcement because higher-frequency strategies likely underestimate the effects of policy transmission.

The events that news outlets select for coverage can be largely explained with a statistic that captures how unexpected they are, suggesting that reporting may be less biased than it appears.

Police misconduct is partially predictable; also, many officers at risk of on-duty misconduct have elevated off-duty risk, suggesting a potential link between accountability and officer wellness.

The increase in aggregate student debt and the struggles of today’s borrowers can be traced to changes in federal policies intended to broaden access to educational opportunities, which increased enrollment and borrowing in higher-risk circumstances.

The Spanish colonial empire in Latin America offers insights into the effects of state formation on economic development and political institutions, with lessons for today. Spain introduced a system in the late 18th century that relied on appointed governors with total authority over an administrative unit, which greatly increased Crown revenue. The reform strengthened state presence and disrupted corruption and exploitation of indigenous communities, but also generated tension with the local elites and plausibly contributed to Latin American independence.

GPT outperforms financial analysts in predicting companies’ earnings changes, especially when analysts struggle, with accuracy comparable to state-of-the-art machine learning models.