Writing for the Financial Times, Prof. Daron Acemoglu examines how a new administration in Washington, D.C. could impact Turkey’s growth. While the implications “are likely to be dire for the Turkish economy,” Acemoglu adds that “even modest attempts towards a more inclusive economy can spearhead rapid and relatively high-quality growth.”
Writing for The Wall Street Journal, Senior Lecturer Robert Pozen argues that index stock options are the best way to ensure CEOs are paid based on their performance. “Indexed options are designed to reward managerial skill instead of fortuitous movements of the stock market,” he writes, citing Prof. Bengt Holmstrom’s Nobel-prize winning research on incentives.
Prof. Antoinette Schoar writes for The Wall Street Journal about her research examining the quality of advice financial advisors provide to their clients. Schoar writes that her research has shown that “holding financial advisers to higher fiduciary standards is not only good consumer financial protection but is also good market economics.”
Senior lecturer Robert Pozen writes for The Financial Times about the new money market (mm) reforms. Pozen argues that “in 2017, the SEC should re-consider its new rules on institutional MM funds in light of the actual rise in borrowing costs for banks, companies and local governments.”
Jericka Duncan of CBS Evening News speaks with Prof. Antoinette Schoar about her research investigating how credit card companies target consumers based, in part, on their level of education. “Customers who are more educated and financially more sophisticated receive very different credit terms,” she explains.
Prof. Antoinette Schoar writes for The Wall Street Journal about her research examining how credit card companies are using customer data to target specific consumers. Schoar writes that “as more and more personal data becomes available, businesses are now able to target customers in a personalized and sophisticated way.”
MIT has been named the top university in the world in the latest QS World University Rankings, reports Nick Morrison for Forbes. This is the fifth consecutive year that MIT has earned the number one spot in the QS rankings.
Prof. Ricardo Caballero and his colleagues have found that due to the integrated nature of the world’s financial markets, “a slump in some economies can eventually engulf all of them.” The Economist notes that the researchers found “once a few economies become stuck in the zero-rate trap, their current-account surpluses exert a pull which threatens to drag in everyone else.”
Prof. Andrew Lo writes for The Wall Street Journal that robo advisors could prove helpful to investors if they are able to assist with managing emotions. “Instead of artificial intelligence, we should first conquer artificial emotion—by constructing algorithms that accurately capture human behavior, we can build countermeasures to protect us from ourselves."
In an article for Reuters, James Saft writes that MIT researchers have found that analyzing Twitter sentiment can provide useful information for investors. “We exploit a new dataset of tweets referencing the Federal Reserve and show that the content of tweets can be used to predict future returns,” Prof. Andrew Lo and grad student Pablo Azar explain.
Prof. David Singer weighs in on the Federal Reserve’s decision to raise its target interest rate in this article for The Conversation. Singer writes that, “a less appreciated facet of liftoff is that the Fed’s balance sheet is now so large that raising interest rates is logistically and mechanically challenging.”
Financial Times reporter Rebecca Knight discusses MIT Sloan’s Master of Finance program and how to be a successful asset manager with Senior Lecturer Gita Rao. “It takes an incredible focus,” says Rao. “You have to be very decisive [and] you have to be an independent thinker.”
Research by the MIT AgeLab identified key practices and characteristics that clients value in financial advisors, reports Russ Alan Prince for Forbes. “Client satisfaction is essential for a successful financial advisory practice,” writes Prince. “While technical proficiency is what clients are supposedly ‘buying,’ other factors also prove to be very important.”
For his work developing pricing models, Prof. Stephen Ross has been awarded the Deutsche Bank Prize in Financial Economics, Reuters reports. The Center for Financial Studies, which awards the prize, said that, "Ross’s models have changed and advanced economic practice profoundly.”
Prof. Stephen Ross has won the 2015 Deutsche Bank Prize in Financial Economics, reports Jack Newsham for The Boston Globe. Jan Pieter Krahnen, director of the Center for Financial Studies, which presents the prize, explains that Ross’ work “has shaped today's thinking in financial innovation, practice, and policy.”