March Editor’s Choice: The cost of steering in financial markets: Evidence from the mortgage market

Luigi Guiso, Andrea Pozzi, Anton Tsoy, Leonardo Gambacorta, Paolo Emilio Mistrullie

Banks steer customers into mortgages. The welfare costs are large. The average cost of the distortion is equivalent to 16% of the annual mortgage payment. A financial literacy campaign is beneficial for naive households, but hurts sophisticated ones.

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April 2022 Editor’s Choice: Keeping options open: What motivates entrepreneurs?

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February Editor’s Choice: Decomposing Firm Value