Oliver Hart is the 6th Nobel Prize winner to appear on Trend Following Radio. He is a British-born American economist, and currently the Andrew E. Furer Professor of Economics at Harvard University. He received the Nobel Memorial Prize in Economic Sciences in 2016 for his work on contract theory.
Oliver is an expert on contract theory, theory of the firm, corporate finance, law and economics. He studies how ownership roles, structure and contractual arrangements are used in the governance and boundaries of corporations. How did he get his start? After receiving his PhD from Princeton in 1974, he began studying general equilibrium under uncertainty – particularly the behavior of firms when under uncertainty. Summer of 1983 was when his career path shifted – specifically to contracts. He became less interested in what firms should do, and more interested in how firms align with what shareholders want them to do.
Following the 2008 financial crisis, Oliver believed it was dangerous to start intervening in such a fragile economy. Yes, it was an unprecedented crisis but, Oliver believes it was totally overblown. No physical or human assets were disappearing and we had mechanisms such as bankruptcy to fall back on. What was the reasoning behind some banks beings saved and others not? Wall Street was bailed out but mainstream was not? Oliver looked at the crisis as arbitrary and rigged. Michael and Oliver wrap the podcast up discussing the differences in block chain and bitcoin and end the podcast with a 6 minute bonus Q&A.
In this episode of Trend Following Radio:
- Venture capital
- Residual control
- Irrational exuberance
- Currency equilibrium
- Differences in bitcoin and blockchain
- Efficient Market Theory