Financial Theory with John Geanakoplos 1. Why Finance?
1. Why Finance? Transcript and Lesson Notes
Financial Theory (ECON 251) This lecture gives a brief history of the young field of financial theory, which began in business schools quite separate from economics, and of my growing interest in the field and in Wall St
Quick Summary
Financial Theory (ECON 251) This lecture gives a brief history of the young field of financial theory, which began in business schools quite separate from economics, and of my growing interest in the field and in Wall St
Key Takeaways
- Review the core idea: Financial Theory (ECON 251) This lecture gives a brief history of the young field of financial theory, which began in business schools quite separate from economics, and of my growing interest in the field and in Wall St
- Understand how Arbitrage fits into 1. Why Finance?.
- Understand how efficiency fits into 1. Why Finance?.
- Understand how collateral fits into 1. Why Finance?.
- Understand how mortgage fits into 1. Why Finance?.
Key Concepts
Full Transcript
Financial Theory (ECON 251) This lecture gives a brief history of the young field of financial theory, which began in business schools quite separate from economics, and of my growing interest in the field and in Wall Street. A cornerstone of standard financial theory is the efficient markets hypothesis, but that has been discredited by the financial crisis of 2007-09. This lecture describes the kinds of questions standard financial theory nevertheless answers well. It also introduces the leverage cycle as a critique of standard financial theory and as an explanation of the crisis. The lecture ends with a class experiment illustrating a situation in which the efficient markets hypothesis works surprisingly well. 00:00 - Chapter 1. Course Introduction 10:16 - Chapter 2. Collateral in the Standard Theory 17:54 - Chapter 3. Leverage in Housing Prices 33:47 - Chapter 4. Examples of Finance 46:13 - Chapter 5. Why Study Finance? 50:13 - Chapter 6. Logistics 58:22 - Chapter 7. A Experiment of the Financial Market Complete course materials are available at the Yale Online website: online.yale.edu This course was recorded in Fall 2009.
Lesson FAQs
What is 1. Why Finance? about?
Financial Theory (ECON 251) This lecture gives a brief history of the young field of financial theory, which began in business schools quite separate from economics, and of my growing interest in the field and in Wall St
What key concepts are covered in this lesson?
The lesson covers Arbitrage, efficiency, collateral, mortgage, psychology.
What should I learn before 1. Why Finance??
Review the previous lessons in Financial Theory with John Geanakoplos, then use the transcript and key concepts on this page to fill any gaps.
How can I practice after this lesson?
Practice by applying the main concepts: Arbitrage, efficiency, collateral, mortgage.
Does this lesson include a transcript?
Yes. The full transcript is visible on this page in indexable HTML sections.
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