Date: 25th February 2019   Time: 18:30-20.00
Venue: Old Theatre, Old Building (map)
Speaker: Andrei Shleifer (Harvard)
Chair: Dimitri Vayanos (FMG/LSE)

The collapse of Lehman Brothers in September 2008 caught markets and regulators by surprise. Although the government rushed to rescue other financial institutions from a similar fate after Lehman, it could not prevent the deepest recession in postwar history. In this lecture, Andrei Shleifer makes us rethink the financial crisis and the nature of economic risk. It reveals how our beliefs shape financial markets, lead to expansions of credit and leverage, and expose the economy to major risks. Using the latest research in psychology and behavioral economics, Shleifer presents a new theory of belief formation that explains why the financial crisis came as such a shock to so many people—and how financial and economic instability persist.

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Andrei Shleifer is John L. Loeb Professor of Economics at Harvard University. He holds an undergraduate degree from Harvard and a Ph.D. from MIT. Before coming to Harvard in 1991, he has taught at Princeton and the Chicago Business School. Shleifer has worked in the areas of comparative corporate governance, law and finance, behavioral finance, as well as institutional economics. He has published seven books, including The Grabbing Hand (with Robert Vishny), Inefficient Markets: An Introduction to Behavioral Finance, and A Crisis of Beliefs: Investor Psychology and Financial Fragility (with Nicola Gennaioli), as well as over a hundred articles. Shleifer is an Editor of the Quarterly Journal of Economics, and a fellow of the Econometric Society, the American Academy of Arts and Sciences, and the American Finance Association. In 1999, Shleifer won the John Bates Clark medal of the American Economic Association.  According to RePEc, Shleifer is the most cited economist in the world.

Dimitri Vayanos is Professor of Finance at London School of Economics, where he also directs the Financial Markets Group Research Centre.

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