TY - JOUR T1 - Why Should Asset Management Be Interested in New Economic Thinking? JF - The Journal of Portfolio Management DO - 10.3905/jpm.2022.1.413 SP - jpm.2022.1.413 AU - Sergio Focardi AU - Frank J. Fabozzi Y1 - 2022/08/18 UR - https://pm-research.com/content/early/2022/08/18/jpm.2022.1.413.abstract N2 - Modern economies are evolutionary complex systems managed with principles based on old, inadequate economics. This introduces a new type of risk for asset managers because mainstream economics does not recognize evolutionary complexity or the role of qualitative changes. In failing to do so, the likelihood of inferior investment decisions by asset managers has increased, a risk the authors label economic theory risk. In this article, the authors outline new economic thinking relative to the dynamics of inflation and the role of money and credit in modern economies, providing a descriptive framework that includes qualitative changes and the complexity of modern economies. Although the new economic thinking has not yet been adopted at the decision-making level, it allows asset managers to understand the risks associated with decision making based on inadequate economic theories. ER -