Pioneers of Modern Finance

It was the late 1960s, long before many other business schools recognized finance as a distinct field of study. In a move emblematic of the institute’s mission-driven culture, MIT Sloan founded the Finance Group to further advance the study and application of the science of finance.

Thanks to the intellectual contributions of Paul A. Samuelson and the academic leadership of Professor William Pounds, who was dean of MIT Sloan from 1966 to 1980, the Finance Group coalesced into an influential collection of scholars around a common interest.

Members and collaborators of this academic unit became the pioneers of modern finance, including Fischer Black, John Cox, Stewart Myers, and Nobel Laureates Robert Merton, Franco Modigliani, and Myron Scholes.

Breakthroughs in financial economics have since become synonymous with MIT, such as the Black-Scholes/Merton option-pricing model; the Modigliani-Miller theorem; continuous-time models of consumption and portfolio choice; applications of option-pricing theory to real investments and corporate finance; theories of firm capital structure; equilibrium models of interest rates; binomial option-pricing; and the risk-neutral methods for pricing derivative securities.

Solving Complex Problems

Today’s Finance Group is continuing this legacy of excellence and thought leadership. The finance research program spans all of the sub-disciplines that financial economics has produced over the last four decades.

Finance Group teaching activities include courses in the MBA program, Master of Finance program, Sloan Fellows MBA program, Executive MBA Program, the undergraduate program, as well as other programs and collaborations with organizations and universities around the world. Simultaneously, their research and thought leadership are shaping finance ideas that push the boundaries beyond mainstream thinking, paying tribute to the group’s original founding mission.