Dan Greenwald has received the 2016 Richard Stone Prize in Applied Econometrics, awarded biennially to “the best paper with substantive econometric application” published in the preceding two years (in this case, the 2014 and 2015 volumes) of the Journal of Applied Econometrics (JAE).
Dan’s winning paper, co-authored with Vasco Cúrdia (Federal Reserve Bank of San Francisco) and Marco Del Negro (Federal Reserve Bank of New York), is entitled “Rare Shocks, Great Recessions” (Journal of Applied Econometrics, 29 (7): 1031-1052, November/December 2014).
Despite the potential appeal of reverse mortgages to retirees who could benefit from tapping into their home equity for retirement, the demand for these loans has been “extremely limited,” says Deborah Lucas, distinguished professor of finance at the MIT Sloan School of Management, in a recent report titled “Hacking Reverse Mortgages.”
"We believe investing for the long term can help clients withstand the inevitable volatility of the equity market. CFA and MIT professor Mark Kritzman quantified this concept in his article 'What Practitioners Need to Know…About Time Diversification.'"
Andrew Lo, Director of the Laboratory for Financial Engineering at MIT's Sloan School of Management, demonstrated the utility of patient preference information to explicitly identify the acceptable level of risk that participants were willing to take in a clinical trial.
Antoinette Schoar, the Michael Koerner '49 professor of entrepreneurial finance and chair of the finance department at the MIT Sloan School of Management, teamed up with research co-authors Sendhil Mullainathan at Harvard University and Markus Noeth at Hamburg University to send out a group of mystery shoppers to talk to advisors in and around Boston, to evaluate their advice on how to invest their retirement funds outside of 401(k) plans.
An SEC-imposed fiduciary rule that goes into effect in April next year will require US financial advisors to put their clients' best interests first – a stricter standard than that of “suitability,” which only compels advice in line with clients' interests. According to Financial Advisor IQ, the practical difference between these two standards was examined in a study conducted by MIT Professor Antoinette Schoar, along with Sendhil Mullainathan and Markus Noeth, which was published in The Wall Street Journal.
College of Financial Services joined distinguished MIT staff (Professor Deborah Lucas and Professor Robert Merton), as well as other housing experts, to discuss the importance of home equity and the role of reverse mortgages in retirement planning.
Professor Robert C. Merton says MIT is seeking to train more people who can understand the complexities of derivatives today. He says he's been working for much of the past 12 years on ways to help pension savers better fund their retirements, which is another important use of financial innovation, especially in the current low-rate environment.
Nobel prize-winner and MIT Professor Robert Merton strongly disagrees with criticism from bankers and investors over the usefulness of options and other financial derivatives, according to a recent interview with Bloomberg.
Antoinette Schoar is the Michael Koerner '49 professor of entrepreneurial finance and chair of the finance department at MIT Sloan. She writes, "The world we live in asks us to make an abundance of financial decisions every day. These range from the inane, such as whether to risk a parking ticket when you stop for one minute to drop off your dry-cleaning; to the highly complex, such as which funds and investment products to pick for your retirement savings..."
“Dealers can accommodate a one-way flow, but high-frequency traders don't want to take inventory because they are very lean,” said Haoxiang Zhu, an assistant professor of finance at MIT Sloan, who studies asset pricing and financial-market structure. “Matched orders are easier to execute. Huge one-way flows could be trickier.”
There appears to be a close connection between starting one's career in a recession and developing a reputation as a conservative, low-risk manager, says Antoinette Schoar, a professor of finance at the MIT Sloan School of Management, who did the study along with Luo Zuo, an assistant professor of accounting at Cornell University.
The recent MIT Sloan conference, “FinTech and the Disruption of Finance,” addressed how big data, machine learning and blockchain technology can provide customized products and services. In her “Mastering FinTech for a Changing World” presentation, Antoinette Schoar, a professor of entrepreneurial finance at MIT Sloan, showed logos of some 1,800 so-called fintech startups that have launched in the past few years to fill gaps left by traditional institutions.
In a keynote address this month, Robert C. Merton, distinguished professor of finance at the MIT Sloan School of Management and 1997 Nobel Laureate in Economics, spoke at the 2016 Retirement Investing Conference in Oxford, England, sponsored by the Journal of Investment Management (JOIM), Oxford University and the EDHEC Risk Institute.
Credit-card terms offered to more financially sophisticated consumers differ significantly from those offered to less sophisticated customers, according to research by WSJ Expert Antoinette Schoar, who is professor of entrepreneurial finance and chair of the finance department at MIT Sloan.
“Imagine if all your traders were required to wear wristwatches that monitor their physiology, and you had a dashboard that tells you in real time who is freaking out,” said Andrew Lo, MIT professor of finance.
Massachusetts Institute of Technology Professor of Finance Andrew Lo discusses the importance of monitoring the emotions of traders on "Bloomberg Markets.”
Leveraged buyouts are a powerful tool to alter incentives in firms and improve their corporate governance. Despite these benefits, the use of the buyout transaction varies wildly over time. What explains this dramatic time-variation in activity? Prior literature and the popular press largely focus on how the cost of debt impacts buyout activity, as debt is a key input to the buyout transaction. Another popular explanation is a periodical form of irrational exuberance for buyouts. In Buyout Activity: The Impact of Aggregate Discount Rates (forthcoming, Journal of Finance), we argue that these approaches miss the forest for the trees: the overall cost of capital, rather than debt alone, is the primary driver of buyout activity.
The director of the Laboratory for Financial Engineering at MIT, Professor Andrew Lo, believes that there has been a step-change in the technology: "All new technologies come with a certain degree of hype, but I do think there has been a material change in the technology today against where things stood even just five years ago."
Jonathan Parker is a finance professor at MIT's Sloan School of Management. He says, “When interest rates are extremely low then government spending is relatively cheap, and so that suggests that it's a good time to do things that you think you have to do at some point.” (1:47)