Addressing the Psychology of Financial Markets

Article

Professor Tuckett suggests the key to understanding financial markets is the co-evolution of human nature and financial institutions. He explains the role of stories centred on 'phantastic objects' and groupthink in helping to create asset price bubbles. He concludes that measures to prevent bubbles in the future will be ineffective if they do not include a collective re-examination of the ways savings are managed and a deeper understanding of the emotional nature of the situation financial markets make us all confront.

Professor Tuckett suggests the key to understanding financial markets is the co-evolution of human nature and financial institutions. He explains the role of stories centred on 'phantastic objects' and groupthink in helping to create asset price bubbles. He concludes that measures to prevent bubbles in the future will be ineffective if they do not include a collective re-examination of the ways savings are managed and a deeper understanding of the emotional nature of the situation financial markets make us all confront.

Related items

  1. View of Bank of England, Royal Exchange, and Duke of Wellington equestrian statue (1844) with skyscrapers and construction in background.

    Navigating in the fog: Why the OBR should hold its nerve on the productivity forecast

    The fiscal watchdog is under pressure to downgrade its forecast, costing the chancellor billions – but this would be premature.
  2. A busy bus full of people of all ages. An older couple smile at a younger woman with a baby in a pushchair

    Everyday concerns: What people want from transport

    Transport has a key role to play in achieving the UK government's missions and improving lives. 
  3. An unrecognisable woman playing a slot machine in a social club

    Reforming gambling taxation: How to lift half a million children out of poverty

    A key priority for the government’s upcoming child poverty strategy should be to remove the two-child limit and scrap the household benefit cap.