Yale School of Management - Financial Crisis Resource

This page highlights the material from Yale SOM faculty, students, and alumni who discussed the economic downturn that unfolded in 2008, debated the causes of the turmoil in the markets, and proposed potential remedies.

A Crisis of Understanding - Commentary by Robert J. Shiller

March 15, 2010
In a Project Syndicate commentary, Prof. Robert J. Shiller explains that economists are not in a good position to forecast the end of the current economic crisis.

Professor Gary Gorton to Testify on Causes of the Financial Crisis

February 26, 2010
Prof. Gary Gorton will present research on the shadow banking system at a Financial Crisis Inquiry Commission forum examining the causes of the crisis.

America is in Need of a Pep Talk from its President - Commentary by Robert J. Shiller

February 18, 2010
In a Financial Times op-ed, Professor Robert J. Shiller writes about the extent to which national leaders can boost economic confidence.

Dealing with "Too Big to Fail" - Commentary by Prof. Shyam Sunder

February 4, 2010
Professor Shyam Sunder provides suggestions on how to mitigate the problems caused by financial firms that are "too big to fail."

NYT Features Prof. William Goetzmann’s Research into the History of Real Estate Securitization

February 2, 2010
New research by Prof. Will Goetzmann finds the recent collapse of the real estate securities market wasn’t the first in U.S. history.

What if a Recovery Is All in Your Head? - Commentary by Robert J. Shiller
November 23, 2009
"Beyond fiscal stimulus and government bailouts, the economic recovery that appears under way may be based on little more than self-fulfilling prophecy," writes Robert Shiller in the New York Times.

In Praise of Kenneth Feinberg - Commentary by Jeffrey Sonnenfeld

October 27, 2009
Prof. Jeffrey Sonnenfeld discusses why the Obama administration's pay czar may be the Walter Cronkite or King Solomon of resolving financial disputes.

A Bounce? Indeed. A Boom? Not Yet. - Commentary by Robert J. Shiller

October 12, 2009
In the NYT, Prof. Robert Shiller writes that the sudden rise in home prices "...probably reflects a new home-buyer emphasis on market timing."

Banking Panics: Deja Vu All Over Again - Commentary by Gary Gorton
October 5, 2009
Prof. Gary Gorton is the first contributor to the New York Times' DealBook Dialogue, an online round table of experts examining the topic "Too Soon to Rethink? Assessing the Financial Crisis."

In Defense of Financial Innovation - Commentary by Robert Shiller

September 28, 2009
In the Financial Times, Robert Shiller writes that complex financial products have the potential to protect investors from risk and should not be discouraged in response to the financial crisis.

The Case for a Global Central Bank - Commentary by Jeffrey E. Garten

September 21, 2009
In BusinessWeek, Jeffrey Garten writes that "...a global central bank is becoming a necessity in today's complex, interconnected world economy."

An Echo Chamber of Boom and Bust - Commentary by Professor Robert Shiller
August 31, 2009
In the New York Times "Economic View" column, Robert Shiller writes that a social epidemic is supporting renewed confidence in the economy.

Fed Chairman Cites Research by Profs. Gorton and Metrick in Speech on Financial Crisis
August 25, 2009
Fed Chairman Ben Bernanke referenced research by Professors Gary Gorton and Andrew Metrick in remarks on the financial crisis delivered at the Federal Reserve Bank of Kansas City’s Annual Economic Symposium.

Executive Compensation on Wall Street
August 3, 2009
An ABC World News report featured the comments of associate professor Jonathan G.S. Koppell on bonus payments made by banks that accepted bailout funds from the federal government.

America Still Rules – Commentary by Jeffrey E. Garten
July 30, 2009
In Newsweek, Jeffrey Garten writes that “…America can lead the global recovery politically without having to do all the heavy lifting economically.”

Conference Highlights Financial Crisis Research
July 28, 2009
This summer marks the two-year anniversary of the start of the financial crisis. The ICF at the Yale School of Management and the Review of Financial Studies assembled researchers to discuss what they have learned about the crisis and its causes.

Financial Invention vs. Consumer Protection - Commentary by Professor Robert Shiller
July 21, 2009
In the NYT, Robert Shiller writes "…Innovation often entails tension between safety and power. We need to foster [financial] inventions that better human welfare while incorporating safety mechanisms that protect the public."

Pay, Risk and Stewardship (pdf) June 16, 2009
The Millstein Center report "Pay, Risk and Stewardship" outlines policy recommendations in three critical areas raised in the financial crisis as issues for reform: pay for performance, risk oversight and management, and shareholder stewardship.

Agenda for Private Sector Reform (pdf) June 16, 2009
The Millstein Center report "Agenda for Private Sector Reform" is a governance reference for private sector players to use when considering reforms to restore public and regulatory confidence in the capital market.

Why Home Prices May Keep Falling – A Commentary by Professor Robert Shiller
June 8, 2009
In the New York Times, Robert Shiller outlines several factors that can explain long, steady declines in the real estate market.

How Rick Wagoner Lost GM – A Commentary by Professor Jeffrey Sonnenfeld June 2, 2009
Jeffrey Sonnenfeld wrote in BusinessWeek that, despite complex factors for the company’s collapse, former CEO Rick Wagoner will be known as the man who lost GM.

The Consequences of Graduating in a Bad Economy May 11, 2009
Professor Lisa Kahn's research that finds graduating in a bad economy has a negative long-term effect on wages was featured on the front page of the Wall Street Journal.

Depression Scares Are Hardly New – A Commentary by Professor Robert Shiller May 4, 2009
In the NYT, Robert Shiller writes that the current depression scare is weaker than those of the past based on consumer confidence measures.

Study: Hedge Fund Managers’ Reputation Concerns Influence Strategy April 28, 2009
“Many believe hedge funds are playing an important role in the current financial crisis. To fully appreciate the impact of this industry on the overall economy, one has to understand the reputation concerns of hedge fund managers,” says Professor Hongjun Yan.

"Systemic Risk" – Remarks by Ira M. Millstein (pdf) April 24, 2009
In a speech at the ABA Section of International Law Spring Meeting, Millstein discussed the failure of regulators, policymakers, and corporate leaders to manage systemic risk as the underlying cause of the financial crisis.

Reserve Bank of India Official Speaks about the Impact of the Financial Crisis at First South Asian Business Forum Conference April 21, 2009
The first conference by the SOM South Asian Business Forum focuses on how India is faring under global financial crisis and what opportunities still exist.

Professor Robert Shiller Explains Role of Animal Spirits in Economic Crisis and Recovery in New Book April 14, 2009
In their new book Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism (Princeton University Press), Robert J. Shiller and co-author George A. Akerlof explain how the world economy fell into — and can recover from — the current crisis in terms of animal spirits, or the changing patterns of people’s feelings and ideas. Read the first chapter of the book online (pdf).

Restoring Trust: Proposals for Shareowner Stewardship April 7, 2009
In this commentary, Stephen Davis, senior fellow of the Millstein Center, highlights the findings of a recent roundtable on shareowner stewardship the center convened in New York City.

It Pays to Understand the Mind-Set – A Commentary by Professor Robert Shiller
March 31, 2009
In an "Economic View" column published in the New York Times, Professor Robert Shiller argues that human psychology needs to be respected alongside quantitative analysis to forecast economic risk. Read the story.

Q5: Is Globalization in Crisis? March 19, 2009
In a preview article from Q5, four experts - Newsweek International editor Fareed Zakaria, former SOM dean Jeffrey E. Garten, and Yale University faculty Amy Chua and Paul Kennedy - discuss whether the effects of the ongoing economic crisis threaten to roll back globalization.

The Case of the Auto Bailout March 18, 2009
The mayor of Kokomo, Indiana, and a UAW representative discuss the plight of American automakers in an SOM class with a companion case study.

Millstein Center Proposes First Code of Conduct for Proxy Advisors March 2, 2009
Voting Integrity, a new policy briefing from the Millstein Center, proposes steps to boost transparency among institutional investors and the proxy voting services that advise them.

The Dangers of Turning Inward - A Commentary by Professor Jeffrey E. Garten March 2, 2009
In a Wall Street Journal essay, Garten argues that if economic nationalism escalates, the political and financial damage will be severe.

Can Talk of a Depression Lead to One? - A Commentary by Professor Robert Shiller February 23, 2009
Stories about the Great Depression have started to inform our expectations for the current economic crisis, writes Shiller in the New York Times.

If You’re So Rich, Why Aren't You Smart? - A Commentary by Professor Jeffrey Sonnenfeld February 12, 2009
Sonnenfeld argues that Wall Street executives should welcome President Obama's salary cap proposal and its pay-for-performance incentives.

How About a Stimulus for Financial Advice? – A Commentary by Professor Robert J. Shiller
January 20, 2009
In an "Economic View" column in the New York Times, Shiller argues that the government should start a program to subsidize financial advice for all.

ICF Research Helps Measure the Magnitude of the U.S. Stock Market Drop January 15, 2009
2008 was the second-worst year for U.S. equities since 1825 according to data from the NYSE History Research Project at SOM’s International Center for Finance.

Leon Metzger Advises Congress on Financial Regulatory Reform January 5, 2009
Metzger, a lecturer in finance, testified before a U.S. House of Representatives Financial Services Committee hearing on "Assessing the Madoff Ponzi and the Need for Regulatory Reform." Read the full text of Metzger's prepared testimony (pdf).

Learn more about how Metzger teaches SOM students about the challenges of running a hedge fund in his course at Yale.

Creative Destruction: An interview with Dick Foster December 2008
In an interview with the McKinsey Quarterly Dick Foster, a senior faculty fellow at SOM, examines how the financial crisis is another cycle of creative destruction.

The Big Bang of Bailouts – A Commentary by Professor Jeffrey E. Garten December 16, 2008
In the December 22 cover story of Newsweek International, Garten writes that world leaders need to spend about $4 trillion more to restore confidence.

Financial Disaster Recovery – A Commentary by Ira Millstein and George Vojta December 16, 2008
Millstein and Vojta write that failures in corporate governance and risk management have damaged trust in financial institutions, and it will not be restored through regulation alone.

To Build Confidence, Aim for Full Employment -
A Commentary by Professor Robert Shiller
December 16, 2008
In an "Economic View" column in the New York Times, Shiller argues that firm economic targets, including full employment, are needed to restore Americans’ confidence.

Millstein Center Report: Open Board-Shareowner Communication Can Help Restore Trust
December 16, 2008
A new policy briefing by Yale SOM's Millstein Center finds dialogue can enhance board authority, especially during crises.

Private Equity Veteran Addresses State of the Industry in Millstein Center Talk December 8, 2008
Russell Carson, co-founder and general partner of one of the country’s largest private investment firms, described the challenges facing private equity.

An Obligation To Relevance -
A Commentary by Dean Sharon Oster
December 5, 2008
Yale SOM Dean Sharon M. Oster was one of five business school deans asked to contribute an essay to a special report by Forbes.com devoted to how business schools are responding to the global economic crisis.

Forward Thinker - A Commentary by Professor Roger Ibbotson Explains the Crisis and What’s Ahead
December 5, 2008
In a Wealth Manager magazine cover story, Ibbotson explains how the financial crisis developed and outlines the opportunities ahead for investors.

Economic Crisis Could Push Reform in China - A Commentary by Professor Zhiwu Chen November 17, 2008
Chen offers a blueprint for China that focuses on diffusing the nation’s wealth effect by boosting domestic consumption and promoting private ownership.

Stop the Bail Outs Now - A Commentary by Professor Jeffrey E. Garten November 5, 2008
In Newsweek magazine, Garten argues that governments around the world need to stop pouring money into failing industries.

Challenging the Crowd in Whispers, Not Shouts - A Commentary by Professor Robert J. Shiller
November 3, 2008
In an "Economic View" column in the New York Times, Shiller argues that groupthink kept economic experts from sounding the alarm on the financial crisis.

India and the global financial crisis - A Commentary by Professor Robert J. Shiller October 20, 2008
In an essay in the Economic Times of India, Shiller looks at how the disruptions in financial markets are affecting India.

Q4 Magazine and Website Provide Viewpoints on Recent Events
October 20, 2008
The recently published Q4 magazine contains discussions around the question "What's the new capital up to?", including a look at how the securitization of subprime mortgages caused widespread havoc in the financial markets.

The Trickle-Up Bailout - A Commentary by Professors Jonathan G.S. Koppell and William N. Goetzmann
October 1, 2008
Writing in the Washington Post, Koppell Goetzmann argue that paying off all delinquent mortgages would address the underlying cause of the financial crisis, help homeowners, and revive the markets.

Global Authority Can Fill Financial Vacuum - A Commentary by Professor Jeffrey E. Garten
September 30, 2008
Writing in the Financial Times, Garten argues that, given the borderless nature of financial markets, we need a “Global Monetary Authority” to oversee the international system.

Discussing What's Happening on Wall Street in Class September 30, 2008
Around SOM, students and faculty have been diving into the rapidly evolving Wall Street crisis.

A Root of the Financial Crisis September 18, 2008
In a preview article from Q4 magazine, Yale SOM professors Frank J. Fabozzi, William N. Goetzmann, and Gary B. Gorton discuss how a dip in house prices spawned chaos in the financial system.

A Failure Tax - A Commentary by Professor Jonathan GS Koppell September 17, 2008
In a New York Times op-ed, Koppell argues that investment banks and other companies should pay for "too big to fail" insurance.

Herbert M. Allison on an Earlier Bailout September 2008
Herbert M. Allison, a member of Yale SOM’s Board of Advisors and a graduate of Yale College, took on a major role in the response to the current crisis when he was named CEO of Fannie Mae in the wake of the government’s takeover of the mortgage giant. Read about how he helped solve an earlier crisis.

Professor Robert Shiller Writes about the Subprime Market in New Book
September 2008
In The Subprime Solution: How Today’s Global Financial Crisis Happened and What to Do about It, Shiller argues that the core problem of the subprime crisis is that we as a society do not understand, or know how to deal with, speculative bubbles. Read the first chapter of the book online.
Read an additional excerpt on the Qn Website.