In the last few months, I have been thinking a lot about the potential causes of our global financial crisis. I have done my best to capture my thoughts in various entries in this blog as well as in seminars I recently gave at Imperial College and MIT. While doing research on the subject, I came across a few interesting, perhaps somewhat far-out articles that took my thinking in intriguing directions. Let me share some of them.
Gender diversity and the financial crisis
Is testosterone to blame for the financial crisis?, asks a Scientific American Science blog, as it writes: “High levels of testosterone are correlated with riskier financial behavior, new research suggests. Men with more of the sex hormone made riskier investments than guys with lower levels, according to a study published online yesterday in Evolution and Human Behavior.”
An article in The Guardian reports on a separate study of traders in a London bank. “They found that those traders with higher testosterone levels in the morning were most likely to make money on the day's trading. One trader hit a six-day "winning streak" during which he made more than double his daily profit. During that time his testosterone levels went up 74%. The team also found that cortisol levels among the traders increased when their takings became more volatile and the market generally was less stable.”