Financial Theory

Course Description

This course attempts to explain the role and the importance of the financial system in the global economy. Rather than separating off the financial world from the rest of the economy, financial equilibrium is studied as an extension of economic equilibrium. The course also gives a picture of the kind of thinking and analysis done by hedge funds.

Course Structure:
This Yale College course, taught on campus twice per week for 75 minutes, was recorded for Open Yale Courses in Fall 2009.

Financial Theory
About Professor John Geanakoplos
John Geanakoplos is James Tobin Professor of Economics at Yale University. He received his Ph.D. in Economics from Harvard University in 1980. He has been Director of the Cowles Foundation for Research in Economics, co-Director of Hellenic Studies Program at Yale, chairman of the science steering committee at the Santa Fe Institute and Managing Director of Fixed Income Research at Kidder, Peabody & Co. Prizes he received include the Samuelson Prize (1999), and the Bodossaki Prize in economics (1994). He is a member of the American Academy of Arts and Sciences (since 1999) and was visiting professor at MSRI in the UC Berkeley, Churchill College, Cambridge, the University of Pennsylvania, Harvard, Stanford, and MIT. He was one of the founding partners of Ellington Capital Management, where he remains a partner. One of his current research topics is th
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Video Lectures & Study Materials

Visit the official course website for more study materials:

# Lecture Play Lecture
1 Why Finance? Play Video
2 Utilities, Endowments, and Equilibrium Play Video
3 Computing Equilibrium Play Video
4 Efficiency, Assets, and Time Play Video
5 Present Value Prices and the Real Rate of Interest Play Video
6 Irving Fisher's Impatience Theory of Interest Play Video
7 Shakespeare's Merchant of Venice, Collateral. Present Value and the Vocabulary of Finance Play Video
8 How a Long-Lived Institution Figures an Annual Budget. Yield Play Video
9 Yield Curve Arbitrage Play Video
10 Dynamic Present Value Play Video
11 Social Security Play Video
12 Overlapping Generations Models of the Economy Play Video
13 Demography and Asset Pricing: Will the Stock Market Decline when the Baby Boomers Retire? Play Video
14 Quantifying Uncertainty and Risk Play Video
15 Uncertainty and the Rational Expectations Hypothesis Play Video
16 Backward Induction and Optimal Stopping Times Play Video
17 Callable Bonds and the Mortgage Prepayment Option Play Video
18 Modeling Mortgage Prepayments and Valuing Mortgages Play Video
19 History of the Mortgage Market: A Personal Narrative Play Video
20 Dynamic Hedging Play Video
21 Dynamic Hedging and Average Life Play Video
22 Risk Aversion and the Capital Asset Pricing Theorem Play Video
23 The Mutual Fund Theorem and Covariance Pricing Theorems Play Video
24 Risk, Return, and Social Security Play Video
25 The Leverage Cycle and the Subprime Mortgage Crisis Play Video
26 The Leverage Cycle and Crashes Play Video


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