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ECON GU4860 Behavioral Finance. 3 points.

Prerequisites: ECON UN3211 and ECON UN3213 and ECON UN3412

Neoclassical finance theory seeks to explain financial market valuations and fluctuations in terms of investors having rational expectations and being able to trade without costs. Under these assumptions, markets are efficient in that stocks and other assets are always priced just right. The efficient markets hypothesis (EMH) has had an enormous influence over the past 50 years on the financial industry, from pricing to financial innovations, and on policy makers, from how markets are regulated to how monetary policy is set. But there was very little in prevailing EMH models to suggest the instabilities associated with the Financial Crisis of 2008 and indeed with earlier crises in financial market history. This course seeks to develop a set of tools to build a more robust model of financial markets that can account for a wider range of outcomes. It is based on an ongoing research agenda loosely dubbed “Behavioral Finance”, which seeks to incorporate more realistic assumptions concerning human rationality and market imperfections into finance models. Broadly, we show in this course that limitations of human rationality can lead to bubbles and busts such as the Internet Bubble of the mid-1990s and the Housing Bubble of the mid-2000s; that imperfections of markets — such as the difficulty of short-selling assets — can cause financial markets to undergo sudden and unpredictable crashes; and that agency problems or the problems of institutions can create instabilities in the financial system as recently occurred during the 2008 Financial Crisis. These instabilities in turn can have feedback effects to the performance of the real economy in the form of corporate investments.

Spring 2022: ECON GU4860
Course Number Section/Call Number Times/Location Instructor Points Enrollment
ECON 4860 001/15443 T Th 4:10pm - 5:25pm
717 Hamilton Hall
Harrison Hong 3 59/86

Economics - Mathematics

General Studies

http://bulletin.columbia.edu/general-studies/majors-concentrations/economics-mathematics/

Departmental Office: 1022 International Affairs Building; 212-854-3680 http://www.columbia.edu/cu/economics/

Economics - Philosophy

General Studies

http://bulletin.columbia.edu/general-studies/majors-concentrations/economics-philosophy/

Departmental Office: 1022 International Affairs Building; 212-854-3680 http://www.columbia.edu/cu/economics/

Economics - Political Science

General Studies

http://bulletin.columbia.edu/general-studies/majors-concentrations/economics-political-science/

Departmental Office: 1022 International Affairs Building; 212-854-3680 http://www.columbia.edu/cu/economics/

Economics - Statistics

General Studies

http://bulletin.columbia.edu/general-studies/majors-concentrations/economics-statistics/

Departmental Office: 1022 International Affairs Building; 212-854-3680 http://www.columbia.edu/cu/economics/

Economics

General Studies

http://bulletin.columbia.edu/general-studies/majors-concentrations/economics/

Departmental Office: 1022 International Affairs Building; 212-854-3680 http://www.columbia.edu/cu/economics/

Financial Economics

General Studies

http://bulletin.columbia.edu/general-studies/majors-concentrations/financial-economics/

Departmental Office: 1022 International Affairs Building; 212-854-3680 http://www.columbia.edu/cu/economics/

Economics

Columbia College

http://bulletin.columbia.edu/columbia-college/departments-instruction/economics/

...Statistics ECON GU4860 Behavioral Finance ECON UN3211 Intermediate Microeconomics ECON UN3213 Intermediate Macroeconomics ECON UN3412...