Professional Development Seminar: The impact of the GFC on finanical risk attitudes
From: Thursday July 26, 2018, 12:30 pm
To: Thursday July 26, 2018, 1:30 pm
The impact of the GFC on finanical risk attitudes
The effects of the Global Financial Crisis (GFC) on the financial risk attitudes of households are studied using panel data for Australia from 2001 to 2015. A model incorporating experienced returns is specified where the weights on past stock returns are allowed to vary over time. The empirical results provide strong evidence of risk attitudes becoming more myopic at the start of the GFC in 2008, with the effect dissipating by 2015. Households are also found to be more sensitive to financial shocks during the GFC and post-GFC periods, with the change in sensitivity found to be uniform for all households regardless of age. An important implication of the empirical results is that they are able to explain some of the cross-country differences in risk tolerance reported in the literature.
About the speaker
Buly is Associate Professor in the Department of Economics and Finance in the La Trobe Business School.
His research interests relate to development and application of theoretical and empirical economic models of individual and household decision making.
These models have been applied to a range of finance, investment and social policy issues, but it is his work on the economics of education and household finance that has the widest readership and impact.
Some of Buly’s important contributions range from the empirical modelling of issues like higher education participation and outcomes and differences between public and private schools, to theoretical modelling of education decisions at the household level and how these decisions and policies affect welfare, income distribution, growth and political decisions through social choice.
Lecture theatre 901, 9th floor, 300 Flinders Street, Melbourne VIC 3000