While neurological studies have tried to identify components responsible for fear and greed, the impact on finance is less clear.

Maybe we should teach schoolchildren probability theory and investment risk management.

The United States has the most sophisticated financial markets in the world, which does not leave much room to maneuver. But it also offers investors the greatest access to information and the ability to execute trades quickly and efficiently. So it is a mixed bag of opportunity.

Many of us like to think of financial economics as a science, but complex events like the financial crisis suggest that this conceit may be more wishful thinking than reality.

Economists suffer from a deep psychological disorder that I call 'physics envy'. We wish that 99 percent of economic behavior could be captured by three simple laws of nature. In fact, economists have 99 laws that capture 3 percent of behavior. Economics is a uniquely human endeavor.

Labor is getting more expensive and technology is getting cheaper.

Great investors need to have the right combination of intuition, business sense and investment talent.

Financial crises are an unfortunate but necessary consequence of modern capitalism.

The risks facing hedge funds are non-linear and more complex than those facing traditional asset classessuch risks are currently not widely appreciated or well-understood

My mother died of lung cancer last year. I felt helpless. As an economist, I thought, What can I do?