We propose several econometric measures of systemic risk to capture the interconnectedness among the monthly returns of hedge funds, banks, brokers, and insurance companies based on principal components analysis and Granger-causality tests. We find that all four sectors have become highly...

The recent financial crisis has generated many distinct perspectives from various quarters. In this article, I review a diverse set of 21 books on the crisis, 11 written by academics, and 10 written by journalists and one former Treasury Secretary. No single narrative emerges from this broad and...

In Volume 5 of the Annual Review of Financial Economics, we continue focusing on the role of banks and credit in the recent financial crisis with articles on too big to fail, credit-rating agencies, corporate governance for banks, bank leverage and real interest rates, and financial contagion in...

In this article, I describe my approach to dealing with the challenges and opportunities of synchronous online teaching during the Fall semester of 2020 in the specific context of a 90-student graduate course in healthcare finance at the MIT Sloan School of Management

The portfolio approach of financing drug development has been proposed as a financial innovation to improve the risk/return tradeoff of investment in drug development projects through the use of diversification and securitization. By investing in a sizable and well-diversified portfolio of novel...

We propose several econometric measures of connectedness based on principal-components analysis and Granger-causality networks, and apply them to the monthly returns of hedge funds, banks, broker/dealers, and insurance companies. We find that all four sectors have become highly interrelated over...