This module introduces behavioral finance, emphasizing the psychological factors influencing financial decision-making. Professor Shiller explores how insights from various social sciences have reshaped our understanding of finance. Key topics include:
This introductory module sets the stage for the course, outlining its objectives and relevance. Professor Shiller discusses the overarching themes, required textbooks, and the connection to related courses, particularly the interplay with Professor Geanakoplos's course on Financial Theory.
In this module, Professor Shiller addresses the critical concepts of risk and financial crises. He discusses how these elements have shaped the financial landscape and their implications for understanding market behavior. Students will learn about historical crises and the underlying risk factors that contribute to market volatility.
This module highlights the significant role that finance and insurance play in our economy and society. Professor Shiller emphasizes the importance of studying financial systems and their influence on various sectors. Key topics include:
This module reviews essential concepts in probability and statistics that underpin financial theories. Professor Shiller explains how these mathematical principles are applied in finance, particularly in risk management. Key topics include:
This module delves into the impact of technology and innovation on finance. Professor Shiller outlines how advancements have reshaped risk management practices and financial systems. Key topics include:
This module focuses on portfolio diversification, a fundamental concept in risk management. Professor Shiller explains how to allocate resources among various asset classes to optimize expected returns while managing risk. Key elements include:
This module examines the role of insurance as a key institution for risk management. Professor Shiller discusses how insurance pools risks to minimize overall exposure and enhance public welfare. Key topics include:
This module discusses efficient markets versus excess volatility. Professor Shiller reviews the efficient markets hypothesis and its implications for stock price behavior. Key points include:
This module introduces behavioral finance, emphasizing the psychological factors influencing financial decision-making. Professor Shiller explores how insights from various social sciences have reshaped our understanding of finance. Key topics include:
This module addresses human behavior in finance, including fraud, manipulation, and regulation. Professor Shiller discusses how regulatory bodies work to protect investors against psychological pitfalls. Key themes include:
This module focuses on long-term investing strategies. David Swensen, Yale's Chief Investment Officer, shares insights on how to achieve positive investment returns over time. Key discussions include:
This module provides an overview of debt markets and their significance compared to equity markets. Professor Shiller discusses how debt is issued and valued, addressing key concepts such as:
This module examines the stock market's role as an information center for corporations. Professor Shiller discusses ownership structures, dividends, and the effects of leverage on corporate performance. Key points include:
This module focuses on real estate finance and its vulnerability to economic crises. Professor Shiller discusses the factors influencing real estate investments and the cyclical nature of home buying. Key topics include:
This module discusses banking, highlighting both successes and failures within the banking system. Professor Shiller explains how banks have evolved and their critical role in the economy. Key themes include:
This module delves into market efficiency, tackling the question of whether markets truly reflect all available information. Andrew Redleaf shares insights on the challenges of beating the market and discusses psychological barriers. Key points include:
This guest lecture features Carl Icahn, an influential activist investor, sharing his career journey and insights into corporate finance. He discusses the current economic landscape and the challenges facing corporate management. Key themes include:
This module explores the evolution of monetary policy and the role of central banks. Professor Shiller discusses the historical context and modern practices in stabilizing economic fluctuations. Key topics include:
This module discusses investment banking and secondary markets, emphasizing their roles in the financial system. Professor Shiller discusses reforms and the importance of regulatory oversight. Key points include:
This module examines professional money managers and their influence on individual investments. Professor Shiller discusses the need for financial advisors and the regulatory framework to protect investors. Key topics include:
This module discusses the various exchanges where securities are traded, including the role of brokers and dealers. Professor Shiller highlights innovations that have transformed trading practices over time. Key points include:
This module examines private equity and its implications during financial crises. Stephen Schwarzman discusses the global finance landscape and the role of private equity firms. Key discussions include:
This module focuses on forwards and futures markets, tracing their origins and evolution. Professor Shiller discusses the purpose of these markets in managing risk for various assets. Key points include:
This module explores the expansion of futures markets beyond agriculture. Professor Shiller discusses how these markets now serve a broader range of assets, impacting pricing strategies. Key themes include:
This module examines options markets and their significance in portfolio management. Professor Shiller explains the structure and pricing of options contracts. Key discussions include:
This final module discusses the democratization of finance, highlighting tools for individual risk management. Professor Shiller reviews the historical context of social insurance programs and their impact on inequality. Key points include:
This module features Professor Summers discussing lessons learned from financial crises. He addresses the role of monetary policy and the interconnectedness of economic cycles. Key topics include:
This concluding module continues Professor Summers' analysis of financial crises, focusing on the current subprime crisis. He discusses the implications for interest rates and regulatory measures. Key themes include: