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A conference on the economic lessons from the financial crisis

Some economic events are so major and unsettling that they "change everything." Such is the case with the financial crisis that started in the summer of 2007 and is, in several respects, still ongoing. Yet enough time has now elapsed for economists to dig deeper than the usual focus on the immediate causes and consequences of the crisis. How have these stunning events changed our thinking about the role of the financial system in the economy, about financial innovation, about the efficiency of financial markets, and about how the government should regulate finance?

To address these issues, the Russell Sage Foundation and The Century Foundation hosted a conference on the financial crisis at the Princeton Club on Friday, April 13, 2012. Four panels of experts shared their assessments of discrete aspects of the crisis and pointed to changes that should be made in the financial industry, in government regulation, and in the thinking of economists. Federal Reserve Chairman Ben S. Bernanke offered his thoughts on lessons learned from the crisis. Conference working papers and presentations can be found in the links presented below.

    Session One: Rethinking Market Efficiency
    10:00-11:00
    Moderator: Robert Solow
  • The Efficient-Market Hypothesis and the Financial Crisis
    Burton G. Malkiel, Princeton University
  • Behavioral Finance in the Financial Crisis: Market Efficiency, Minsky, and Keynes
    Hersh Shefrin, Santa Clara University and Santa Clara University
  • Why Did So Many People Make So Many Ex Post Bad Decisions: The Causes of the Foreclosure Crisis
    Paul Willen, Federal Reserve Bank of Boston
  • Video:
    Session Two: Rethinking Financial Innovation
    11:15-12:15
    Moderator: Alan Blinder
  • Ratings, Mortgage Securitizations, and the Apparent Creation of Value
    John Hull, University of Toronto and Alan White, University of Toronto
  • The Role of ABS, CDS, and CDOs in the Credit Crisis and the Economy
    Robert A. Jarrow, Cornell University
  • Finance vs. Wal-Mart: Why Are Financial Services So Expensive?
    Thomas Philippon, New York University
  • Video:
    Lunch: 12:30 - 2:00
  • Keynote Speaker: Ben S. Bernanke, Chairman of the Board of Governors of the Federal Reserve System, "
    Session Three: Rethinking Financial Regulation
    2:15-3:15
    Moderator: Andrew Lo
  • Shadow Finance
    Patrick Bolton, Columbia University, and Tano Santos, Columbia University, and Jose Scheinkman, Princeton University
  • The Political Economy of Financial Regulation after the Crisis
    Robert E. Litan, The Ewing Mario Kauffman Foundation
  • Pay, Politics, and the Financial Crisis
    Kevin J. Murphy, University of Southern California
  • Video:
    Session Four: Rethinking Macroeconomics and Finance
    3:30-4:30
    Moderator: Alan Blinder
  • This Time, It Is Not Different: The Persistent Concerns of Financial Macroeconomics
    J. Bradford DeLong, University of California, Berkeley
  • Credit Supply Shocks and Macroeconomic Activity in a Financial Accelerator Model
    Simon Gilchrist, Boston University
  • Session Powerpoint Slides
  • Video: