Joachim Klement+

Government debt changes the impact of monetary policy

To fight inflation, the ECB and other central banks hiked interest rates.

Can AI labs ever turn a profit?

Anthropic is about to IPO and I collect a lot of different data points in my latest Reuters column to asses if they can ever become profitable.

How prepared is Europe for war?

Let’s face it, it is increasingly likely that at some point in the future, Russia will test Europe’s resolve in defending itself against the threat of Russian invasion.

Nationalisations don’t work

It is well-known that nationalising businesses or entire industries does not work.

Who is the best manager?

The selection of management talent is one of the most critical tasks in a company.

You can smoke this study

Friday posts are about the weird and wonderful side of econ research and the studies that are so clearly wrong that you wonder how anyone ever thought it would be a good idea to post them online.

Flippin’ heck

Agentic workflows are increasingly used in investment applications.

Corporate taxes and creative destruction

There aren’t many good things that happen in a recession or a crisis, but Schumpeterian creative destruction is one of them.

Index funds make active managers worse

‘Blame it on the index funds’ is a popular game when it comes to analysing market concentration and the extreme valuations of US megacaps.

Companies are already feeling the pain

Climate change is here.

The economics of being an artist

Some artists are uber-rich; most are not.

AI could help governments cut debt — but unevenly

My latest opinion piece for Reuters is out this morning.

The impact of acquisitions on stock returns

Sometimes, I come across an academic study that was supposed to investigate something else entirely, yet the message I take away is something different altogether.

Who forecasts how?

One of the eternal debates in the investment world is whether professional forecasters and investors are better at forecasting market and stock returns than individual investors and corporate executives.

The impact of the US-China chip ban on third parties

Since 2020, US administrations of both parties have implemented bans on chip and semiconductor manufacturing equipment to China.

The heating hammer that killed Germany’s heating law

In the countries where I regularly read the press (UK, Germany, USA), most of the press is conservative-leaning or outright conservative, with liberal outlets reaching only a minority of the population.

Do your homework, but do it right

A year ago, I wrote a two-part series about a fascinating research study from MIT that showed that using AI for essay writing makes you feel like you did good work when in truth you didn’t. One problem is that using AI or even Google search changes the activation patterns in your brain

What if the Strait of Malacca is closed?

It is one of the funny things in financial markets that every year, we all suddenly become experts in something new.

Central bankers draw on their experiences

It won’t surprise anyone when I say that central bankers, just like the rest of us, rely to some extent on their lifetime experiences when they do their job.

More than a military alliance

What happens when a country (e.g.

Can US democracy survive its debt tipping point?

My latest opinion piece for Reuters is out this morning.

The growth effects of natural disasters

I don’t have to tell anyone living in Europe in the summer of 2026 that extreme weather events are becoming more frequent.

The shape of AI slop

By now, most people who read these posts will be painfully familiar with the signs of AI-generated text.

Build. More. Houses.

Everywhere you go in Europe and the UK, people complain about the lack of affordable housing.

The price momentum of lottery tickets

As long-time readers know, I like to analyse momentum effects and find ways to improve momentum strategies since they tend to be prone to momentum crashes.

Southeast Asia as the new investment hub

When the US government imposed tariffs on pretty much every trading partner, it triggered a chain reaction that continues to ripple through the world.

Organic farming isn’t that much of a boon

I happen to have some in-laws in Germany who are biodynamic farmers.

It’s not me, it’s you

Every four years, I publish my World Cup forecasts as an exercise in showing that economists think they can meddle in everything, even though they have no clue and should better leave the topic alone.

The costs and benefits of working for a large asset manager

Fund managers always wonder if they should go it alone and set up their own boutique firm or be part of a larger asset management firm with its considerable marketing and distribution power.

Efficiency or resilience? Democracies can only pick one

Back from my holidays, I penned a little bit of a philosophical opinion piece for Reuters.

We are all ‘in hock to the bond market’

I honestly get really aggravated when I hear politicians on the left of the political spectrum argue that we should stop paying attention to bond markets and rather spend more to help people.

Defence spending and the stability of a country

Defence spending is rising across Europe, and I guess that the War in Iran will lead to more defence spending in that region as well.

Story-telling animals

Suppose you are invested in the stock of company A.

The performance decay of LLM trading strategies

A couple of months ago, I wrote about an experiment where researchers from the San Francisco Fed asked ChatGPT to forecast inflation.

Higher deficits cause inflation

It is a long-established fear among bond investors and economists that a country that runs higher budget deficits will eventually suffer from higher inflation in order to indirectly ‘default’ on its debt.

Knowledge and experience are what count

Which equity analysts are voted star analysts in the annual beauty parade provided by a variety of companies?

Let the climate wars begin

Climate change increases the risk of floods, droughts and other natural catastrophes that cause extreme stress, particularly in poor societies.

It’s not the fault of right-wing news

I am definitely not breaking new ground when I say that the US public is polarised.

Here is one reason why better managed firms succeed

A couple of months ago, management consulting firm McKinsey published a report where they took the management of UK businesses to task.

If this is true, the hyperscalers are toast

In my regular research (behind a paywall), I have been saying for a while that I think the future of AI is not large language models (LLM), but small language models (SLM) run on local desktop computers or even mobile phones.

When it comes to inflation, ‘in’ is better than ‘out’

One of the advantages that countries outside the Eurozone have is that they can control their monetary policy.

The UK’s experience with the National Living Wage

In the first half of 2016, the UK economy experienced a major shock.

Data-centre reality check could slam brakes on AI earnings boom

My latest opinion piece for Reuters is out today.

Life in Europe is just better

Today is my last post before my usual extended summer break.

What’s so special about a 2% inflation target?

It’s Fed Day again, and the Fed has to deal with inflation rates that remain stubbornly above its 2% target.

Keep your politics out of your investments

I keep telling everyone that you should keep your politics out of your investment portfolio.

How fast money is warping market logic

Another opinion piece from me at Reuters ROI.

Graduating in the age of AI

My wife’s niece (my niece-in-law?) graduated from college in the US this year.

Pets are soooo worth it

It is well-established that owning pets, on average, makes people happier.

Attracting investor flows through customer data

For decades, Meta, Alphabet and others have mined customer data to sell ads and other products to business customers.

If interest rates rise, do we have to worry about credit defaults?

Thanks to rising inflation, central banks on both sides of the Atlantic are pondering whether they have to hike interest rates.

Which news is incorporated slowly?

The news flow (or rather, deluge) is relentless, and nobody can stay ahead of all the news published on markets and companies anymore.

Guardian readers have fewer children

I sometimes hear people lament that young people are reluctant to have children because they don’t want them to deal with a world that gets destroyed by climate change.

The failure gap

Apparently, most people vastly underestimate how often things around them go wrong.

What’s in an odd number?

I used to collect wine (back when I still drank alcohol), and as part of that, I sometimes went to fine wine auctions.

Jevons’ Paradox seems alive and well

While many people fear that AI will eliminate millions of white-collar jobs, many have argued that Jevons’ Paradox indicates that the opposite may happen.

Why NATO should ask Ukraine for help

A bit more geopolitics from me at Reuters.

Are Europeans finally becoming stock investors?

To pre-empt the inevitable comment about headlines that are questions, the answer to this one is an unequivocal ‘kind of’.

When regulation is good for business

By now, I think I have established both my view that I am a fan of ESG investing and the benefits of regulating what is and isn’t a sustainable investment, and my view that in Europe, ESG regulation has gone too far and become too costly.

There is never good news in Iran

Let’s face it, most of us form our opinions about other countries based on the news reports we get from these countries.

The hidden risks from synthetic risk transfers

Synthetic Risk Transfers (SRT), where banks keep loans nominally on their books but sell the risk exposure to other investors via credit-linked notes or financial guarantees, have become big business, particularly in Europe.

A blessing in disguise for the EU?

Donald Trump’s tariffs are upending global trade in many ways, both intended and unintended.

It’s a lazy week

Yesterday, I gave professional investors an idea of how to be lazy when it comes to market returns in the second month of a quarter.

Just do what you did last month

If you are a professional investor covering US or European stocks, you are about to come to the end of another busy earnings season.

Slashing immigration could lead to higher taxes

My latest opinion piece for Reuters Open Interest is out this morning.

Repeat after me: Higher minimum wages are good for business

Increases in minimum wages in a country or different states of the US are sure to make headlines.

The name is Spy, Corporate Spy

Espionage is a constant threat to governments and the military everywhere.

Labour shortages are coming. What are businesses going to do?

In an ageing population, labour shortages are intensifying gradually as the working-age population starts to shrink.

AI can’t even forecast inflation

Most readers will be aware that the US Department of Defence has signed a contract with OpenAI to use their models to develop AI weapon systems.

Are stocks a good inflation hedge?

Longtime readers of mine will know that I do not believe in the story that stocks are a hedge against inflation.

The real reason why some companies are moving to the US

Sometimes, you come across a story that seems too good to be true.

Unpredictability creates alpha: Fund picking

Yesterday, I wrote about a new paper by Lauren Cohen and her colleagues that trained an AI to forecast the investment decisions of fund managers.

Unpredictability creates alpha: Stock picking

Regular readers of these missives know that I sometimes come across papers that are so full of important insights that I discuss them in several posts.

Is nonlinear momentum the answer?

I have been harping on about how life is nonlinear and that linear approaches to investing are bound to be inferior (see here for an example in economics and one in finance).

Standardisation helps

Investors and businesses alike complain about the growing need for ESG reporting and the standardisation and formalisation of it all.

More than you think

How much money do you need to live a contented life?

No, stocks are not a good inflation hedge

My latest post for Reuters is online.

China is expanding its trade war toolbox

While we in the West were focusing on the Iran war, the Chinese government has calmly implemented new regulations on industrial and supply chain security. It is, on the one hand, a law that aims to “enhance the resilience and security level of industrial and supply chains, and safeguard economic and social stability and national security”

Which imports really matter for inflation

Thanks to the war in Iran and the closure of the Strait of Hormuz, we are experiencing rising inflation all over the globe again.

Women get worse investment advice

There are plenty of differences between men and women; how they invest their money, how they deal with risk, etc.

Retail investors overestimate the impact of ESG investments

When I talk to retail investors, I am surprised by how often I hear claims that investing in a green fund or green stocks reduces greenhouse gas emissions.