耶鲁大学金融市场英文文本FinancialMarketsLecture03TranscriptWord下载.docx

1、bec, which is the big wealth management fund for the Province of Quebec. I met a lot of people there and I never once got the idea that anyone there was evil or grasping. I think they have a moral purpose, which is to preserve the livelihoods of the people of the Province of Quebec. You get a very d

2、ifferent view of things when you meet the people. I think our entertainment industry likes to make movies about people in finance, but they are inevitably portrayed as evil and I dont know why that is. I dont think there has ever been a major motion picture about a financial person who ended up a ph

3、ilanthropist. Why is that? I just dont-people dont like-people would rather hate-I dont know why its something-it wouldnt be a good movie theme, would it? Anyway, you have to overcome these-you have to think that if you go into the field you would probably-If youre successful-you would probably end

4、up as a philanthropist; but no movie will be made about your life and you may encounter hostility the whole way. Its especially true right now with the subprime crisis. People are blaming the financial community for our troubles now. It is true that were seeing some people thrown out of their houses

5、, in some cases, because of some rather questionable financial practices that got people into mortgages that they shouldnt have gotten into. But overall, I think that the people in this field are good people. In the last lecture, I talked aboutIn the second lecture, I talked about the pooling of ris

6、ks and the basic theme of that lecture was that we now have a mathematical theory, probability theory. When you look at this theory, you realize that it suggests a very important technology for improving human welfare and that is: by spreading risks. The economy, and technology, and the weather, and

7、 all sorts of factors create risks. But, the real technology is-the technology that works to eliminate risks is to spread them out, to pool them, to share them among many different people. So, the idea that theorists suggest-and it may be unreachable-but the perfect financial system would have all o

8、f our risks pooled completely. That is, nobody suffers alone. If anything happens to me in my livelihood, then its spread out over everybody and everybody means the whole world. Whatever happens to me, when its spread out over six billion plus people, it ends up divided by six billion and it becomes

9、 unobservable. It becomes so small that its meaningless and thats the ideal. Thats what, in principle, we can do and what I think is the most important concept in finance-this concept of risk pooling. We live in a world where people suffer all kinds of misfortunes. Of course, we can try to get rid o

10、f these misfortunes. We can do research on disease prevention and weather modification and global warming. We can do research on all these things, but theres another technology, which is extremely important. That is, even leaving the risks as they are and just sharing them better. So, Ill be talking

11、 more about this. The problem is that while the principle of risk-sharing is very simple and obvious the practice requires technology. Its just like you could say some of the principles of mechanics are very obvious, but to make an engine that operates in terms of those principles is not obvious. Wh

12、at I want to talk today about is what I call technology in finance. Ill present my view of the situation, but maybe its a rather idiosyncratic view that I have. But, I think-Its not so much idiosyncratic, but its a different emphasis that I put forth. What I want to talkThere are really three themes

13、 to todays lecture: a risk theme, a framing theme, and an invention theme. I want to go over the history of risk management and through these three themes. The first one is, I might say, a long-term risk theme. Let me go over these three themes. The long-term risks are dominant in our lives. By that

14、, I mean that everyones life is a sequence of shocks that accumulate over your life. Im talking about economic shocks. When you start out young-Were unequal at birth, of course, because of our parents and the advantages we have, but relatively equal at a young age. As each year goes by, you accumula

15、te economic shocks, shocks to your human capital, shocks to what you own as you get older. You start-Your human capital is your ability to do things and your knowledge, which is what you have to sell in the marketplace. As you get older, your human capital evolves and it has its ups and downs as you

16、 age and you start switching from human capital to other forms of capital. In other words, you start saving and you own stocks and bonds, and real estate, and other things. Each of these suffers a sequence of shocks that cumulate over your lifetime, so inequality gets worse and worse as people age.

17、It is at its worst after retirement when you are no longer-youve exhausted your human capital and youre living off of all the accumulated physical capital. Thats the life cycle story. Theres great inequality among the elderly and thats a problem. Some of them are living very badly and others are liv

18、ing with great comfort. Thats what finance is about. Its really about people. We dont care at all about corporations-we should make that clear-except as they contribute to individual welfare. I dont care what happens to Citigroup or IBM, except for the fact that there are all those stockholders out

19、there and theyre of all different situations. Some of them are absolutely dependent on their holding of these stocks. Thats what we have to think about and its a long-term problem. The problem with long-term risks, also, is that anything that we do to mitigate these risks creates moral hazard. Thats

20、 another fundamental theme of finance. What is moral hazard? Thats a term that first entered the English language sometime in the mid-nineteenth century, but of course the concept goes earlier. Moral hazard occurs when a risk management institution incentivizes you to do bad behavior-to show bad beh

21、avior. The classic example of moral hazard is with fire insurance. I get fire insurance on my house and so I behave badly: I deliberately burn the house down to collect on my insurance. Thats moral hazard; but its not unique to that, its all over the place. When you manage risks, you create moral ha

22、zard. Thats why we need invention and theory in finance to minimize that. The second theme for this lecture is about framing. By that I mean psychological framing, and there are many psychologists who talk about this, but notably Daniel Kahneman and Amos Tversky. Psychological framing means the tend

23、ency for people to view things in a distorted way depending on how theyre presented. If I present things in one frame, then you would react one way. If I present the same thing in another context or background or environment, then you react very differently. I will expand on this in a minute. The th

24、ird theme is the invention theme of this lecture. That is-I mentioned this before, but I want to expand on it in this lecture-that the history of finance is the history of invention just as much as it is in other fields, notably engineering. The idea that I want to develop is that the history of fin

25、ance is a history of discrete inventions. Non-obvious ideas were conceived of to solve these problems of long-term risks and to get around the psychological barriers imposed by framing biases and psychological biases, in order to allow people to actually manage the risk and to get around moral hazar

26、d. Its a difficult thing to do these things and thats why we need invention. Another thing is that, when once an invention is made, it tends to be copied all over the world. So, the history of finance is largely a history of copying. Thats what you have to do. You may have to adapt it to a particula

27、r environment, but basically it is copying other ideas. Some people in less-developed countries feel uncomfortable that they are just slavishly copying other, more advanced countries; but, they have to recognize that is what everybody has been doing all along. We copy the good ideas and in the proce

28、ss we adjust them and make them a little bit better. New ideas can come from anywhere. The basic thing, though, is that every country has to take the insights that have been developed around the world. Let me come back now-I want to go through these three themes. Let me start with the long-term risk

29、 theme. I want to start with an article, which-mention an article by Backus, Kydland, and Kehoe-actually Backus, Kehoe, and Kydland, three economists David K. Backus, Patrick J. Kehoe and Finn E. Kydland, International Real Business Cycles, Journal of Political Economy, 100（4）:745-775, August 1992.

30、One of these, the last of the three, Finn Kydland, won the Nobel Prize a few years ago. In this article, they talked about the correlation of consumption around the world. What is consumption? Its the amount that people spend on consumption goods, things that you buy for your current use, like food, shelter, clothing, etc. Every country computes an estimate of how much is spent each year on consumption by the people who live in the c