Finance Matters

Finance Matters

Finance Matters: The MIT Sloan Finance Group Blog

Finance Matters is the MIT Sloan Finance Group’s platform for sharing the latest on Finance faculty research, perspectives on financial industry news, MIT Sloan finance-related events, and will feature guest posts from our faculty, students, alumni, and affiliates.

The Consequences of the Government Shutdown

Posted by Jonathan Parker on October 24, 2013

While the press are still celebrating the end of the government shutdown and deconstructing the political fallout, I was on a lunch panel yesterday sponsored by the Center for Finance and Policy here at Sloan on “The U.S. Fiscal Crisis: Causes and Consequences.”  My esteemed colleagues talked about the long run fiscal imbalances, the rise of the dollar and U.S. Treasury debt as reserve assets, and the thorny legal issues facing the Administration as money ran out.   I talked about the consequences of…

Celebrating Black-Scholes-Merton

Posted by MIT Sloan Finance Group on October 24, 2013

Two Nobel Prize winners look back, and forward, as they reflect on their famous model “There are very few academic papers that you have a 40th anniversary for,” said MIT Sloan finance professor Stewart Myers. And yet, in honor of the anniversary of the Black-Scholes-Merton options pricing model, MIT Sloan did just that, with a two-day symposium celebrating the famous model and its widespread adoption and influence. Capping off a day of talks featuring finance professors including Deborah Lucas and…

Understanding the Role of Financial Constraints in the M&A Market

Posted by andreymalenko on September 11, 2013

A decision to expand by acquiring another business is one of the important decisions that a firm’s stakeholders make. Consider a mature firm, such as a big pharmaceutical company, contemplating an acquisition of a growing company, such as a small biotech firm. This decision has three aspects to it: (1) whether to initiate a bid for the target now or later; (2) how much to bid; and (3) what form should the bid take (cash, stock of the combined firm,…

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