MIT Sloan Management Review

Are there more financial crises in store for the world economy? MIT Sloan School Professor Simon Johnson thinks so.

MIT Sloan Professor Simon Johnson gave a talk here at MIT today -- with the cheery title of "The Next Financial Crisis."

Harvard economist Kenneth Rogoff gave a fascinating guest lecture at MIT earlier this week -- looking at commonalities in a number of financial crises. Rogoff, who recently coauthored a new book, This Time is Different: Eight Centuries of Financial Folly with Carmen M.

The bleak labor market for finance professionals may create an unexpected opportunity — for environmental sustainability efforts.

The bleak labor market facing finance professionals may create an unexpected opportunity — for environmental sustainability efforts.

What should we make of the role of financial innovation in precipitating the financial crisis — and how might problems with risk management that the crisis revealed be addressed?

MIT Sloan School professor Simon Johnson offers an unsettling interpretation of the financial crisis. Also: Federal Reserve Chairman Ben Bernanke spoke about the relationship between financial innovation and consumer protection.

“What will be the long-term impact of the crisis on technological innovation?” Joshua Gans examines that question in the new Spring 2009 issue of MIT Sloan Management Review.

In the minds of many, the financial crisis has given innovation a black eye. Disruption theorist Clayton Christensen disagrees.

Fallout from the financial crisis could hinder innovation—by limiting options for technology start-ups.

Harvard’s Martin Feldstein and MIT’s Simon Johnson offer insights on the economy and the banking system.

It's a fairly gloomy week on the world economic stage, with International Monetary Fund managing director Dominique Strauss-Kahn declaring a number of leading economies in depression and U.S. President Obama warning of the possibility of financial catastrophe if a stimulus bill is not passed.

“Highly skilled labor should be reallocated away from the financial industry towards more innovative sectors” of the economy, writes MIT economist Daron Acemoglu in a new essay.

The global financial crisis that occurred in 2008 can be viewed as a systems accident that was fueled, in part, by innovations in the financial sector.

Since 2007, as banks took successive writedowns related to deteriorating mortgage-backed securities, the conventional wisdom was that we were facing a crisis of bank solvency triggered by falling housing prices and magnified by leverage.

Some say the root cause of the global financial crisis was a few regional financiers selling risky mortgages to poor people. How can that be? The subprime mortgage market is a fraction of the U.S. mortgage market, which is a fraction of the U.S.

As he analyzed the financial crisis for Newsweek, Johns Hopkins professor Francis Fukuyama contrasted Silicon-Valley-style technological innovation and financial innovation. Supporters of financial regulation, Fukuyama wrote, had
argued that long-standing regulations like the Depression-era Glass-Steagall Act (which split up commercial and investment banking) were stifling innovation and undermining the competitiveness of U.S. financial institutions.

Maybe it was a case of the "not-invented-here" syndrome — the common phenomenon where organizations aren't open to innovations or ideas they didn't come up with — in Washington.  Or maybe it was just the pressure of time.

Right now, it's hard to escape being inundated with new headlines about the financial crisis. But amid the din of ever-changing news soundbites, it's not easy to make sense of the bigger picture.

Score one for Henry Mintzberg, the well-known management scholar and professor at McGill University. In an essay that has been posted on his website since 2007 but that now seems eerily prescient, Mintzberg predicted that 2008 would see a substantial downturn in the U.S. economy.Â