Professor Jonathan B. Berk Honored With the Fifth Ross Prize in Financial Economics

Written

Professor Jonathan B. Berk Honored With the Fifth Ross Prize in Financial Economics

The Stephen A. Ross Prize has been awarded to the co-authors of an important 2004 paper on mutual funds’ equilibrium behavior.
October 21, 2017
Jonathan B. Berk | Photo by Nancy Rothstein Photography

Jonathan B. Berk, the A.P. Giannini Professor of Finance, is co-author of Mutual Fund Flows and Performance in Rational Markets, published in the Journal of Political Economy in 2004. He and his co-author, the late Professor Richard Green of Carnegie Mellon University, were celebrated at a recent conference of the Foundation for the Advancement of Research in Financial Economics, or FARFE.

The prize committee named this paper the winner of the Stephen A. Ross Prize in Financial Economics because of its important contribution to the understanding of the equilibrium behavior of mutual fund returns and mutual fund flows. The paper led to a reframing of questions asked in mutual fund studies. It demonstrated three key points regarding efficient markets for mutual funds: Actively managed funds do not outperform passive benchmarks, investors reallocate their money to the better-performing funds, and there is no persistence in mutual fund returns.

The prize, which comes with a $100,000 purse, is conferred by FARFE to support research in financial economics and facilitate productive interaction between research and practice in finance. First awarded in 2008, the prize is named in honor of the late MIT financial economist Stephen A. Ross, who passed away in March 2017.

For media inquiries, visit the Newsroom.

Explore More

July 29, 2020
Written
“I was forced to exchange something I had chased for years with something I now find matters more.”
An illustration showing a couple opening the door to their home to see another couple on an iPad screen. Credit: Illustration by Kimberly Salt
July 28, 2020
Written
The MBA admissions team delivers an innovative virtual program that introduced incoming MBA students to the school’s alumni, students, programs, and culture.
A woman rides her bike past the Knight Management Center. Credit: Elena Zhukova
July 24, 2020
Written
While sheltering in place, a Stanford GSB professor decided to write out equations in her kitchen — much to her cat’s confusion.
Senior Associate Dean, Sarah Soule, using her refrigerator as a white board in the early days of quarantine. Credit: Ivan Geraghty