What can we learn from the financial crisis?
Nobel Laureate Joseph E. Stiglitz doesn’t mince his words. As one of the most well-known economists working today, he carries his signature moral compass everywhere he goes. So it’s no wonder he takes a big interest in the recent financial crisis, where he says more could have been done to avoid the worst.
What does the financial sector need to re-establish trust?
What will trust look like in the future?
Myron S. Scholes thinks that technology’s going to play a huge part in shaping the future of finance, and of trust. Scholes suggests that blockchain technology will revolutionize the way markets work. Instead of trust being invested solely in banks and other institutions, we’ll all become trusted actors in a financial play.
Can you ever eliminate risk?
"Don’t put all your eggs in one basket," the saying goes. The same, it turns out, applies to investing - although it’s a bit more complicated than that. Nobel Laureate Harry M. Markowitz came up with a pioneering new way to look at investment called 'Portfolio Theory'. It says investing can be less risky by choosing investments with different levels of risk - and assessing how they work together as a set.
Why is it so hard to beat the stock market?
Nobel Laureate Paul A. Samuelson’s work appears to agree with Markowitz. When starting out in his career he had a clear vision…
What really influences markets?
Taking Samuelson’s work even further, Nobel Laureate Robert J. Shiller aimed to give “a more truthful account” of how markets work, which ultimately led to his first highly influential paper in 1981. Shiller believes it was wrong to be too rigid when assessing the economy.
What sparks economic growth?
Though stock markets ‘may go up as well as down,' Nobel Laureate, Robert M. Solow explored what makes them move. When looking into why some economies grow faster than others, he originally thought the answer was the accumulation of capital - the slow process of saving, investing and building infrastructure. But it wasn’t the case.
How can we predict the future?
The use of technology can help us predict human and market behavior. In Nobel Laureate Robert F. Engle’s lab, he does just that. They run 60,000 econometric models per day, gathering data from every market in the world. The aim is to examine and prove theories, and explore how volatile markets behave over time.
But there’s a problem with long-term risk. It changes.
That’s why Engle uses stress tests for banks to see how they would perform under particular scenarios, and whether they’d have enough capital.