Robin Greenwood | |
---|---|
Born | 1977 |
Institution | Harvard Business School |
Field | Financial economics, stock market, financial bubbles |
Alma mater | Massachusetts Institute of Technology (B.S.) Harvard Business School (PHd.) |
Awards | Jack Treynor Prize |
Robin Greenwood (born 1977) is a British-American economist, and both the George Gund Professor of Finance and Banking and the Anne and James F. Rothenberg Faculty Fellow at Harvard Business School. He was formerly head of the school's finance unit, and chair of the Behavioral Finance and Financial Stability project. He also served on the Financial Advisory Roundtable of the Federal Reserve Bank of New York.
Greenwood is known for his work on behavioral and institutional finance, with a particular focus on "macro-level" market inefficiencies. Other research has included the predictability of stock market bubbles, and behavioural aspects of bond markets.
Greenwood received a B.S. in Economics and Mathematics at MIT in 1998, before receiving his Ph.D. from Harvard in Economics in 2003. [1] [2] During his Ph.D., Greenwood spent time as a post-doctoral Fellow at Harvard Business School, before becoming an Assistant Professor of Business Administration there in 2003. He has remained a member of the school’s faculty since, though was a Visiting Fellow at the London School of Economics in 2007, and a Schoen Scholar at Yale University in 2008. Greenwood became a full professor in 2012. [3] [4] He also spent time, between 2018 and 2021, as head of the Finance Unit at Harvard Business School, and was formerly chair of the Business Economics PhD program. [1]
Greenwood was a member of the Financial Advisory Roundtable of the Federal Reserve Bank of New York alongside Viral Acharya, Thomas Philippon, John H. Cochrane, Jeremy C. Stein and others, and served as an Editor of the Review of Financial Studies. [5] [6] [7] [8]
Greenwood’s research focuses primarily on behavioural and institutional finance, with a specific view on macro-level market inefficiencies; notably monetary policy, stock price bubbles, supply and demand in the bond markets, and predictable financial crises. [9] [10] [11] [12] [13] [14] His work on “Bubbles for Fama”, which defined a crash as a 40% drop within a two-year period and set parameters for the probability of crashes, has been frequently referenced in suggesting that the valuation of Tesla and Bitcoin are bubbles. [15] [16] [17] [18]
Other work includes the role of institutional finance and the 'financialisation' of the economy, as well as private sector impacts on the economy, where a series of articles increased interest in investor expectations. [lower-alpha 1] [19] [20] [21] For his work on an extrapolative capital asset pricing model, the Institute for Quantitative Research in Finance awarded him the Jack Treynor Prize in 2014. [22]
Greenwood also spent time as the faculty director of the Behavioural Finance and Financial Stability project at Harvard Business School.The project, launched in July 2016, focused on analysing and exploring stability within financial systems. Within it, Greenwood led research on liquidity management within banks, and the nature of modern bank runs. His work also linked growth within the financial sector to being a prelude to crisis; [23] the perspective noted that ‘that financial instability often follows periods when financial institutions, like investors and policy makers, have underestimated risks’. [24] Greenwood's later work in 'Predictable Financial Crises' concluded 'the combination of rapid credit growth and asset-price gains during the prior three years is associated with a 40 percent probability of entering a financial crisis within the next three years'. [25]
Greenwood's research has also focused on individual investors, as well as the rise of 'meme stocks' and impact of retail investors in buoying the American market in 2020–21 and research on the impact of COVID-19 on the economy. [26] [27] His research noted that market speculation can flare with the combination of stimulus funds and retail investors. [28] [29] [30] Earlier work, alongside Nicholas Barberis and Andrei Shleifer linked bullishness to frequent extrapolation of results from recent returns, as well as observing the difficulty for individual investors in finding market-beating strategies. [31] [32] [33] [34]
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And our final panelist is Mr. Robin Greenwood , Assistant Professor at the Harvard Business School .
RFS Editor Robin Greenwood's paper is featured in Reuters in a piece titled, "Fed should keep trillions in bonds to provide stability: paper."
The things I've worked on have been investor expectations, measurement of bubbles, and things like that. We did some work on trying to predict the end of bubbles.
The researchers found that the probability of a market sector crashing — defined as a drop of at least 40% over the subsequent two years — was correlated with its trailing two-year performance relative to the overall market.
In making this prediction I am following the lead of an academic study entitled "Bubbles for Fama," which appeared several years ago in the Journal of Financial Economics. Its authors were Robin Greenwood, a finance and banking professor at Harvard Business School and chair of its Behavioral Finance and Financial Stability project
"That's an enormous number," notes Gund professor of finance and banking Robin Greenwood. And that risk compares to just a 7 percent probability in normal times. The association just "jumps out at you. You don't have to do any fancy analysis to uncover it," adds Greenwood, who is coauthor of the Harvard Business School (HBS) working paper, "Predictable Financial Crises,"
The federal Economic Impact Payments distributed during the pandemic were followed by increases in retail trading and the share prices of retail-dominated portfolios, find Robin Greenwood of Harvard Business School and Toomas Laarits and Jeffrey Wurgler of NYU Stern.
Yet there is now academic evidence from Robin Greenwood and Andrei Shleifer at Harvard University that when markets are close to their peak, investors are most bullish because they tend to extrapolate recent rises in prices into the ...
The takeaway, Greenwood told me, is that market-beating strategies don't last forever. Because the index effect used to be large and predictable, it was inevitable that Wall Street would eventually discover it and, in the process, kill the goose laying the golden egg. He and his-co-author write: "The decline of the index effect is much like the evidence for other anomalies [patterns that can be profitably exploited], that they decline once they are well recognized by the market."