What is household finance about and why does it matter? - A portrait of Michael Haliassos (The National Herald)

In an interview with "The National Herald", IMFS Research Professor Michael Haliassos talks about his research in household finance, consumer and investment behavior, and financial literacy.

"There is interest among young people, of all genders and races. There is a recognition that we all need to make financial decisions and learn how to manage opportunities and risks without being destroyed by them", Haliassos said, looking back to the beginnings when there were rarely papers published on household saving, portfolio behavior, borrowing, and investment decisions of individuals. But much has changed since then. “Researchers and policymakers recognized the importance of retirement savings because of the demographic transition,“ Haliassos pointed out.  

Today, houshold finance is an indespensable field in economics. „Tremendous financial innovation created both opportunities and challenges for households.“ According to Haliassos, policymakers realized that financial stability and the impact of macroeconomic policies depended critically on household portfolio composition and on the distribution of wealth and the private financial sector began to realize that they needed to better understand the behavior of their customers. „Computational research methods have improved dramatically, allowing us to solve models that were impossible to solve analytically," he concludes.

The National Herald: "Michael Haliassos: In the world of finance, households matter"