Money management has been a profession involving a lot of fakery - people saying they can beat the market, and they really can't.

My clinical psychologist wife of 40 years has always had a close intellectual influence on me. When I was beginning to talk openly in the economics profession about irrationality in decision-making, I received a lot of criticism. Ginny would support my views and remind me that a whole other profession - psychology - studies people's irrational sides.

Money management has been a profession involving a lot of fakery - people saying they can beat the market, and they really can't.

Can a controlled experiment explain why people like Kewpie dolls in one year, Beanie Babies in another, and American Girl dolls this year? Yet social scientists are asked to answer analogous questions. We economists and perhaps psychologists shouldn't overreact to the derision. That is, we shouldn't try to overlay a false sense of precision on our admittedly squooshy work.

Economists who adhere to rational-expectations models of the world will never admit it, but a lot of what happens in markets is driven by pure stupidity - or, rather, inattention, misinformation about fundamentals, and an exaggerated focus on currently circulating stories.

There is more uncertainty than usual about job futures because computers are replacing more and more human intelligence, and globalization is proceeding at an accelerating pace.

In the short run and for decisions unlikely to have broad impact, it may be more cost effective to use just one expert.