The MIT Press BOOK

"Financial Innovation: Too Much or Too Little?"

Edited by Michael Haliassos


In assigning blame for the recent economic crisis, many have pointed to the proliferation of new, complex financial products--mortgage securitization in particular--as being at the heart of the meltdown. The prominent economists from academia, policy institutions, and financial practice who contribute to this book, however, take a more nuanced view of financial innovation. They argue that it was not too much innovation but too little innovation--and the lack of balance between debt-related products and asset-related products--that lies behind the crisis. Prevention of future financial crises, then, will be aided by a regulatory and legal framework that fosters the informed use of financial innovation and its positive effects on the economy rather than quashing it entirely. The book, which includes two contributions from Robert Shiller as well as a discussion of Shiller’s “MacroMarkets” tool, considers the key ingredients of financial innovation from both academia and industry; the positive potential but also the risks of financial innovation and the influence of producers on consumers; rationality- and behavioral-based viewpoints on the causes of the recent crisis; the link between the cycle of financial innovation and financial crisis; and how future innovation-linked crises might be avoided.

The book emerged from the DB Prize symposium in honour of the 2009 recipient, Robert Shiller of Yale University. Most of the contributors to the book are renowned academics who participated in this symposium – among them Robert Shiller himself –  but the book extends well beyond the ideas expressed in the symposium and stands as a scholarly contribution to discussion of financial innovation, its role in generating the crisis, and its potential role in causing or averting future financial crises.


With contributions by:

Josef Ackermann (Deutsche Bank AG)
Nicholas C. Barberis (Yale School of Management)
John Y. Campbell (Harvard University)
Karl E. Case (Wellesley College)
Robin Greenwood (Harvard Business School)
Michael Haliassos (Center for Financial Studies and Goethe University Frankfurt)
Otmar Issing (Center for Financial Studies)
Alexander A. Popov (European Central Bank)
Robert J. Shiller (Yale University and Yale School of Management)
Andrei Shleifer (Harvard University)
Frank R. Smets (European Central Bank)
Susan J. Smith (Girton College Cambridge)
Maria Vassalou (SAC Capital Advisors, LP)
Luis M. Viceira (Harvard Business School)


>>> About Michael Haliassos (Editor)


Further information:

Hardcover | 35.10 € | $35.00 Short | £24.95 | ISBN: 9780262018296 | 272 pp. | 35 figures, 8 tables | January 2013

Paperback | 16.78 € | $20.00 Short | £13.95 | ISBN: 9780262526722 | 280 pp. | 6 x 9 in | 35 figures, 8 tables| August 2014
Ebook | $14.00 Short | ISBN: 9780262306409 | 280 pp. | 6 x 9 in | 35 figures, 8 tables| December 2012


Link to the book's web page >>


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