Exploiting a unique identification strategy based on inaccurate news analytics, we document an effect of news analytics on the market independent of the informational content of the news. We show that news analytics speed up the stock price and trading volume response to articles, but reduce liquidity. Inaccurate news analytics lead to small price distortions that are corrected quickly. The market impact of news analytics is greatest for press releases, as news analytics exhibit a particular skill in “seeing through” the positive spin of press releases. Furthermore, we provide evidence that high-frequency traders rely on the information from news analytics for directional trading on company-specific news. Received: May 17, 2018; Editorial decision: June 14, 2019 by Editor: Thierry Foucault. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Projects with negative expected value cannot obtain financing in competitive capital markets if all potential investors are risk neutral and have identical beliefs about the distribution of the project′s net revenue. We present a series of examples with heterogeneous beliefs in which it is possible for a project to obtain financing even though all investors in the project believe, conditional on the project being undertaken, that the project has negative expected value. An important feature of the examples is that the differences in beliefs are due only to differences in information, and are not simply arbitrary unexplained differences in opinions. Journal of Economic Literature Classification Numbers:D8, G1.

This paper studies the historical roots of the relationship between economics and psychology, and places recurring controversies between these disciplines in the context of the relationship between economics and the other human sciences, especially sociology. We focus on the formative years of contemporary economics, the early twentieth century, when psychologists and institutionalist economists attacked the unscientific nature of economics. Economists responded by (mistakenly) renouncing verstehen and claiming adherence to behaviorism, rather than by actually addressing the institutionalist critique. Behaviorist economics declared independence from psychology, and by analogy, from the other human sciences. Our illusion of independence continues to this day.

The Mirrlees Review of taxation in the United Kingdom is a landmark in the analysis of U.K. fiscal policy, and of wide interest to public finance economists around the world. This review concentrates on what we can learn from the Review about the current state of public economics and directions for future research. (JEL E62, H20, H50)

Income comparisons between persons or groups of persons in different countries are a special field of inquiry because there are different currency units. For the most part, the other theoretical and empirical problems encountered in international income comparisons are similar to those of within-nation comparisons between different persons at the same time or different groups of persons either interspatially or, what is more common, intertemporally (e.g., constant price series of national income). The qualifications mainly and the most part are included because some writers hold that international comparisons are complicated or even invalidated by differences in consumption patterns. Sometimes differences in tastes are held to underlie these variations in consumption patterns, variations that are often much larger between countries than those found between regions within a country or between different periods in the same country. This essay focuses, in its methodological aspects, on these special problems. The basic problems that are common to international and within-nation comparisons are left to the standard literature on national accounts.2 We turn now to the currency unit problems and reserve the question of tastes for a later section.