Tom Loftus of The Wall Street Journal highlights a study co-authored by MIT Prof. Maryam Farboodi that finds big data plays an important role in raising capital from investors and could contribute to the growing divide between large and small companies.
Prof. Simon Johnson reviews Adam Tooze’s new book, “Crashed: How a Decade of Financial Crises Changed the World” for The Washington Post. Johnson writes that the book, “is an impressive narrative history, weaving together events from around the world with a light touch and a great deal of helpful explanation.”
In an article for the Financial Times, John Gapper highlights a study by Prof. John Van Reenen examining the increasing concentration of industries. Van Reenen explains that globalization and new technology foster superstar companies because “network effects mean that small quality differences can tip a market to one or two players.”
Axios reporter Dan Primack writes about a new study by Prof. Antoinette Schoar examining the performance of sidecar private equity funds. Primack explains that Schoar and her colleagues found that, “GP-directed sidecar funds had worse average performance than did the main funds raised at the same time by the same firms, while discretionary co-investment funds were basically a wash.”
In an article for The Wall Street Journal, Senior Lecturer Robert Pozen argues that having the Securities and Exchange Commission switch to semiannual reporting would not encourage more firms to make long-term investments. Pozen notes that, “a better idea for reforming financial reporting would be for firms to stop issuing ‘guidance’ on their earnings for the next quarter or year.”
Sloan senior lecturer Robert Pozen and undergraduate Ming Lu contributed this article to Fortune about the dangers of having too much employer stock in your 401(k). “[P]ast performance is not a good predictor of future performance—especially in this era of disruptive innovation,” they explain.
Writing for the Financial Times, Senior Lecturer Robert Pozen argues that the European Union needs to improve their efforts to restrict “ratings shopping.” Pozen writes that the European Securities and Markets Authority, “should establish a central and accessible system of public disclosures on both initial approaches and final ratings by each EU issuer of a structured bond.”
Prof. Andrew Lo speaks with Lisa Mullins of WBUR’s All Things Considered about investing in biotech. Lo explains that, “if we can use finance to reduce the risk, we will actually be able to bring lots more capital into the industry and be able to get therapies to patients faster.”
Coryanne Hicks of U.S. News & World Report highlights research by Prof. Andrew Lo and graduate student Pablo Azar in an article about using Twitter to spot financial trends. The study predicted market shifts based on the emotional context of tweets, finding that "when people start to get nervous, you can detect that very clearly," says Lo.
Camila Russo of Bloomberg reports on Gary Gensler’s comments at MIT Technology Review’s Business of Blockchain conference. Gensler, a visiting lecturer at Sloan and former chair of the Commodity Futures Trading Commission, said many cryptocurrenciers “are operating outside of U.S. laws.”
Gary Gensler, a top financial regulator in both the public and private sector, spoke with Nathaniel Popper of The New York Times about virtual currencies and the need for regulation. This fall, Gensler will hold dual appointments at Sloan and the Media Lab, “where he will write and teach about the potential he sees for blockchains to change the financial world.”
Deepa Seetharaman of The Wall Street Journal speaks to Michael Casey, Senior Advisor for Blockchain Opportunities at the Digital Currency Initiative about new uses for blockchain and its potential to cut costs. “[B]ecause of all of this reconciliation, all of this multiple back-checking” Casey suggests that logistics and the financial sector are two areas that will benefit from blockchain technology.
Paul Solman of PBS Newshour speaks to Prof. Andrew Lo about getting investors to finance research into treatments for cancer and genetic diseases. “We now have the opportunity to treat disease in many, many different ways. We just don’t have enough money to explore all of the different pathways,” explains Prof. Lo.
Writing for Scientific American, Prof. Alex “Sandy” Pentland explains how new digital technologies are making it possible to build more efficient financial networks and decentralize the control of money. “That we can now create monetary systems that are truly understandable means we can potentially build the tools for minimizing risk, avoiding crashes, and maintaining individual freedom from intrusive governments and overly powerful corporations.”
In an article for the Financial Times about the best economics books of 2017, Martin Wolf highlights new works by Prof. Andrew Lo and Prof. Peter Temin. Wolf writes that in Temin’s “important and provocative book, [he] argues that the US is becoming a nation of rich and poor, with ever fewer households in the middle.”