Column : Why don’t we invest in equity?
These concerns are primarily political but many have economic underpinnings. They are not restricted to the very poorest in society, although their concerns are, of course, pivotal. Members of the middle classes are also concerned about employment, housing, pensions and retirement. Concerns have also been expressed in the aftermath of the financial crisis about trust in financial institutions. Can they be trusted to preserve and create wealth for the ordinary public rather than merely enriching the elite? The Arab world is an extreme example of the manifestation of concerns that are highly important for people in the bottom two-thirds of the income distribution globally.
Economics has moved towards thinking about these problems more broadly. What was once the purview of specialist economists studying narrowly-defined poverty reduction problems has moved into the mainstream. One way to come at these problems is to define them in terms of the largest financial choices that households make. For example, mortgage availability and choices, personal defaults and payday lending, retirement savings, equity market participation and mutual fund investment. These decisions are affected by two equally important questions. First, are financial institutions structured and
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