Per NPR's Planet Money, a new working paper, ‘The Economics of Financial Stress' looks at what stress can do to a household's financial situation.
The paper is by economists from Bocconi University in Milan, Italy, and the University of California, Berkeley. They polled a group of 10,000 prime-age, employed American workers about their current financial situation, and asked them to speculate about how they would behave if certain financial conditions prevailed in their lives. And they found that the respondents fell into two rough groups: financial sophisticates, and financial naifs.
Most of us are naifs, while a select few are sophisticates. With another recession on the horizon, this has implications-- and reflects, as usual, on capitalism.
