Measuring the costs of short-termism
Mette Nielsen and
Journal of Financial Stability, 2014, vol. 12, issue C, 16-25
A potential cost of modern capital markets is short-termism, with agents in the financial intermediation chain weighing near-term outcomes too heavily at the expense of longer-term opportunities and thus forgoing valuable investment projects and potential output. This paper sets out an analytical framework and empirical estimates of the potential costs of short-termism arising from distortions to the cost of capital and investment intentions.
Keywords: Financial economics; Investment (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:12:y:2014:i:c:p:16-25
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