3. Technology and Invention in Finance

Financial Markets (ECON 252)

Technology and innovation underlie finance. In order to manage risks successfully, particularly long-term, we must pool large amounts of risk among many, diverse people and overcome barriers such as moral hazard and erroneous framing. Inventions such as insurance contracts and social security, and information technology all the way from such simple things as paper, and the postal service to modern computers have helped to manage risks and to encourage financial systems to address issues pertaining to risk. The tax and welfare system is one of the most important risk management systems.

00:00 - Chapter 1. Introduction
05:22 - Chapter 2. Introduction to the History of Risk Management
12:31 - Chapter 3. Long-Term Risk, Risk-Pooling, and Moral Hazard
26:51 - Chapter 4. Inequality and Communism from the View of Risk
35:53 - Chapter 5. Framing: Its Influence on Consumer Perception
47:59 - Chapter 6. The Development of Insurance and other Unobvious Financial Inventions
01:01:00 - Chapter 7. From the Paper Machine to the Present: Information Technology and Its Impact on Postal Service and Social Security

Complete course materials are available at the Open Yale Courses website: http://open.yale.edu/courses

This course was recorded in Spring 2008.