Investment Instability
The discussion highlights the precarious nature of certain investment funds, where the fear of losing money can lead to a rush to withdraw funds, even if the investments are performing well. This phenomenon mirrors the dynamics of bank runs, emphasizing the importance of how withdrawal mechanisms can create instability. A more stable approach would involve allowing withdrawals based on the current value of the fund, rather than at par, to mitigate panic among investors.In this clip
From this podcast
All Else Equal: Making Better Decisions
Ep23 “When Banking Fails” with Amit Seru
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