Two years ago, the Journal of Finance — the most prestigious journal in the field — retracted a published paper because of data errors, either the first or second withdrawal ever by a top-three finance journal. Now the Journal of Financial Economics, another influential publication, has made its own retraction. This is causing some people to declare a replication crisis in finance — missing the point entirely.

The retraction of the 2019 Journal of Financial Economics paper, “Common Risk Factors in the Cross-Section of Corporate Bond Returns,” is actually a story of science working. This is particularly true for the nascent field of research on the corporate bond market, where data is far murkier than in most other markets.

Let me take a few steps back to explain.

QOSHE - Trading Corporate Bonds Is Still More Art Than Science - Aaron Brown
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Trading Corporate Bonds Is Still More Art Than Science

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04.12.2023

Two years ago, the Journal of Finance — the most prestigious journal in the field — retracted a published paper because of data errors, either the first or second withdrawal ever by a top-three........

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