The New Financial Order

This site offers information relating to fundamental innovations in finance, innovations that are being made, likely will be made, or ought to be made in coming years and that have the potential to make important improvements in the economy and our lives. Fundamental innovations will help us to deal with major risks to our livelihoods, our homes, our cities, and our nations, at a time of rapid change in the world economy. This site is concerned not only with finance proper, but also with insurance, public finance, information technology related to finance, behavioral finance, economic theory, psychology and history.

I, partly in collaboration with several coauthors, have written a number of books and papers about financial innovation.

I have also assembled a collection of references to articles and research papers that relate in one way or another to the process of financial innovation.

My colleagues and I have founded a firm MacroMarkets LLC to create new vehicles for management of broad classes of risks. Mr. Samuel Masucci is now the CEO of this firm, based in Madison NJ.

On May 22, 2006 the Chicago Mercantile Exchange with the collaboration of MacroMarkets LLC launched futures and options contracts on U.S. home prices for ten U.S. cities and for a U.S. aggregate. The contracts are cash settled based on the S&P/Case-Shiller Home Price Indices that Karl E. Case and I originally pioneered, and that are now produced by Fiserv Inc. with the collaboration of Standard & Poor's.

On November 30, 2006 the American Stock Exchange , with the collaboration of MacroMarkets LLC launched MacroShares tied to oil prices, both a direct oil (trading symbol UCR for "Up Crude") and an inverse oil (trading symbol DCR for "Down Crude").

I have listed some important web sites that relate to financial innovation.

I write a monthly column "Finance in the 21st Century" for Project Syndicate.

I write a regular column "Economic View" for the New York Times.

I am making available a set of PowerPoint slides for a talk about the book The New Financial Order: Risk in the 21st Century.

I offer a number of links to courses related to the future of finance, including not only my own courses on this topic, but also a variety of related courses by others who, one way or another, offer relevant insights. These links will give an idea of some new directions in finance, and in some cases the web sites will link to syllabi and assigned readings.

My 2008 book Subprime Solution: How Today's Financial Crisis Happened and What to Do about It, Princeton University Press, connects some of the themes of New Financial Order to the subprime crisis, and proposes policy measures to deal with the crisis.

Robert J. Shiller
Cowles Foundation for Research in Economics
and International Center for Finance
Yale University
30 Hillhouse Avenue
New Haven, CT 06511
robert.shiller