When economists play the market

The Chronicle of Higher Education reports on how the American Economic Association is investing its portfolio. Intriguingly they took steps towards reducing home-country bias only a year ago. The discussion:

So the intellectual stakes were presumably high when the ad hoc committee — which included Martin S. Feldstein, chairman of the Council of Economic Advisors during the Reagan administration — made its recommendations last April. According to the minutes of the association’s budget committee, the meeting provoked “a lengthy discussion about whether economists should use economics to guide investment decisions.”

The result:

As satisfying as it might be to see economists fail at this endeavor, we’re obliged to report: The portfolio gained 10.2 percent in 2007, easily beating the S&P 500 index, which gained 5.49 percent.

HT: Greg Mankiw.

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