Mariano Croce is a prominent figure in the field of finance, known for his research contributions in asset pricing, macro-finance, and behavioral finance. His work often explores the complex interplay between macroeconomic conditions, investor sentiment, and asset market dynamics.
A significant portion of Croce’s research centers on understanding how macroeconomic risk, particularly long-run risks, affects asset valuations. He has developed and analyzed models that incorporate slow-moving, persistent shocks to the economy, demonstrating that investors demand a premium for holding assets that perform poorly during economic downturns. This framework helps explain observed patterns in asset returns, such as the equity premium puzzle, where historical equity returns have been higher than predicted by traditional models.
Croce’s work also delves into the role of behavioral biases in financial markets. He investigates how psychological factors, such as overconfidence, herding behavior, and loss aversion, can influence investment decisions and lead to market inefficiencies. By incorporating these behavioral elements into asset pricing models, he provides insights into phenomena like market bubbles, crashes, and periods of excessive volatility.
Another area of focus for Croce is the intersection of finance and environmental sustainability. He has explored the implications of climate change and environmental regulations for asset pricing and investment strategies. His research examines how investors can incorporate climate risks into their portfolios and how sustainable investing can contribute to long-term financial performance. This work is increasingly relevant as investors and policymakers grapple with the financial risks and opportunities associated with a transition to a low-carbon economy.
Croce’s research has been published in leading academic journals, including the Journal of Finance, the Journal of Political Economy, and the Review of Financial Studies. He has also presented his work at numerous conferences and seminars, contributing to the ongoing debate on the forces shaping financial markets.
Beyond his academic contributions, Croce is involved in various advisory roles, providing insights to institutional investors and policymakers on investment strategies and risk management. His expertise is sought after by organizations seeking to navigate the complexities of the modern financial landscape, particularly in the context of macroeconomic uncertainty and evolving regulatory environments.
In summary, Mariano Croce’s work is characterized by its rigorous theoretical foundation, empirical relevance, and focus on the key challenges facing financial markets. His research has advanced our understanding of asset pricing, macro-finance, and behavioral finance, making him a leading voice in the field.