Written on 25 June 2018.
“Leverage Cycles, Credit Surfaces And Central Banking”.
At the EDHEC PhD IN FINANCE FORUM 2018 recently held in London, the keynote speech was delivered by John Geanakoplos, James Tobin Professor of Economics, Yale University. The Leverage Cycle is one of his current research topics, also presented at the North American Summer Meeting of the Econometric Society 2018 in Davis, California (USA), that took place the past weekend.
In this speech, Professor Geanakoplos clarifies the relationship between Collateral, Leverage and Economic Boom/Busts, how leverage is related to collateral, and how collateral value is endogenous: leverage cycle as well as default are also endogenous. He explains the basic analytics elicited by his theory of this economic mechanism.
This talk closed up the EDHEC PhD IN FINANCE FORUM after five research presentations carried out by our graduates and candidates. This PhD forum encourages discussion with the practitioner and academic community about the results of these original contributions, mostly based on the specific dissertation work of the speakers.