Is Passive Investment Actively Hurting the Economy?

3/19/2016

This article from The New Yorker examines the rise of passive investment and its potential impact on the economy. Passive investing involves putting money into index funds or exchange-traded funds that track a particular market index, rather than actively selecting individual stocks. The article discusses the rapid growth of passive investment and the concerns surrounding its impact on market efficiency and corporate governance. It highlights the argument that passive investing may lead to an imbalance of power and reduced competition among companies. The article also explores the argument that passive investment can distort market prices and hinder price discovery. While acknowledging the benefits of passive investing, the author raises thought-provoking questions about its long-term consequences for the economy.

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