Andrei Shleifer

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Andrei Shleifer
Peter A. Diamond[1]
Franklin M. Fisher[1]
Doctoral
students		Sendhil Mullainathan
Matthew Gentzkow
Jesse Shapiro
Emily Oster
Ulrike Malmendier
John Friedman
InfluencesLawrence Summers
Milton Friedman[2]
ContributionsLegal origins theory
Big push model
AwardsJohn Bates Clark Medal (1999)
Information at IDEAS / RePEc

Andrei Shleifer (

economics of transition
.

IDEAS/RePEc ranked him as the second top economist in the world in 2011,[3] and the top economist in 2024.[4] He is also listed as #1 on the list of "Most-Cited Scientists in Economics & Business".[5] On Google Scholar, as of 2024 he had over 400,000 citations.[6]

Life

He was born to a

Brad DeLong; he has said that the course made him realize he was not destined to be a mathematician, but the experience gave him a future co-author.[8] Shleifer also met his mentor and professor, Lawrence Summers, during his undergraduate education at Harvard. The two went on to be co-authors, joint grant recipients, and faculty colleagues.[10]

He has held a tenured position in the Department of Economics at

Graduate School of Business at the University of Chicago and briefly at Princeton University
.

Work

Shleifer's earliest work was in

behavioral finance. In 1997, he and Robert Vishny published "The Limits to Arbitrage" that addressed efficient markets.[12] The article notes that investors who bet against a major overvaluation or undervaluation are exposing themselves to substantial risks if there is uncertainty about how long it will take for the misvaluation to be corrected. This is especially true for a hedge fund for which its investors might withdraw their money if the hedge fund temporarily has disappointing returns, forcing the fund to buy an overvalued asset that it has shorted, or to sell an undervalued asset that it has bought. In Roger Lowenstein's 2000 book, When Genius Failed: The Rise and Fall of Long-Term Capital Management, the author credits Shleifer and Vishny with describing the problem that led to LTCM's
1998 collapse.

Shleifer has also written influential papers on political economy, the economics of transition, and economic development, collaborating with his former colleagues in Chicago, Kevin M. Murphy and Robert W. Vishny. Their paper "Industrialization and the Big Push" was credited by Paul Krugman as a major breakthrough which ended a "long slump in development theory".[13]

With coauthors

Simeon Djankov and Florencio Lopez de Silanes, Shleifer has also made significant contributions to the study of corporate governance. In particular, Shleifer and Vishny's 1997 article A Survey of Corporate Governance[14]
focused on the big differences across countries in the use of bank debt versus equity financing.

Starting in 1997, his research focused on the legal origins theory (also sometimes known as law and finance theory), which claims that the legal tradition a country adheres to (such as common law or various types of civil law) is an important determining factor for a country's development, most of all financial development.

The Clark medal citation described him as a "superb economist, working in the old Chicago tradition of building simple models, emphasizing basic economic mechanisms, and carefully looking at the evidence.... A recurring theme of his research is the respective role of markets, institutions, and governments."[15]

Asset management

In 1994 Shleifer founded

Robert Vishny. As of February 2006, it managed about $50 billion. Shleifer has since sold his ownership stake.[16]

Russian Project

During the early 1990s, Andrei Shleifer, a native Russian speaker, headed a Harvard project under the auspices of the

General Accounting Office investigation, which stated that the Harvard Institute for International Development (HIID) was given "substantial control of the U.S. assistance program.”[19]

In 1997, the U.S. Agency for International Development (USAID) canceled most of its funding for the Harvard project after investigations showed that top HIID officials Andrei Shleifer and Jonathan Hay had used their positions and insider information to profit from investments in the Russian securities markets. Among other things, the Institute for a Law Based Economy (ILBE) was allegedly used to assist Shleifer's wife, Nancy Zimmerman, who operated a hedge fund that speculated in Russian bonds.[18]

In August 2005, Harvard University, Shleifer and the Department of Justice reached an agreement under which the university paid $26.5 million to settle the five-year-old lawsuit. Shleifer was also responsible for paying $2 million worth of damages, though he did not admit any wrongdoing.[11][20]

Works

  • Boycko, Maxim; ——; Vishny, Robert (1995). Privatizing Russia. Cambridge, MA: MIT Press.
    ISBN 978-0-262-02389-4
    .
  • —— (2000). Inefficient Markets: An Introduction to Behavioral Finance. Oxford, UK: Oxford University Press.
    ISBN 978-0-19-829227-2
    .

References

  1. ^
    MIT
    . Retrieved 21 May 2017.
  2. ^ Andrei Shleifer. "The Age of Milton Friedman". Retrieved 2013-10-19.
  3. ^ "Economist Rankings at IDEAS". Ideas.repec.org. Retrieved 2011-09-13.
  4. ^ "Economist Rankings | IDEAS/RePEc". ideas.repec.org. Retrieved 2024-04-24.
  5. ^ "Most-Cited Scientists in Economics & Business" Archived 2015-09-24 at the Wayback Machine ISI Web of Knowledge
  6. ^ Shleifer, Andrei (2024-04-24). "Andrei Shleifer". Google Scholar. Retrieved 2024-04-24.
  7. ^ The Harvard Crimson: "Was Shleifer Screwed? - Sure, he had to pay a $2 million settlement—but he also got mad loot from Harvard" By Zachary M. Seward September 29, 2005
  8. ^ a b Bhayani, Paras D. (June 4, 2007). "Andrei Shleifer and J. Bradford DeLong". Harvard Crimson. Retrieved 2009-03-12.
  9. ^ "Archived copy" (PDF). Archived from the original (PDF) on 2014-01-08. Retrieved 2014-01-08.{{cite web}}: CS1 maint: archived copy as title (link)
  10. ^ a b Wedel, Janine. Shadow Elite: How the World's New Power Brokers Undermine Democracy, Government, and the Free Market. New York: Basic, 2009.
  11. ^
    Boston Globe
    .
  12. JSTOR 2329555
    .
  13. ^ Paul Krugman. "The Fall and Rise of Development Economics". Retrieved 2013-10-19.
  14. JSTOR 2329497
    .
  15. ^ "Andrei Shleifer, Clark medal citation" (PDF). aeaweb.org. Archived from the original (PDF) on 2013-05-30. Retrieved 2013-10-19.
  16. ^ "How Harvard lost Russia". Archived from the original on 2007-09-27. Retrieved 2007-05-06.
  17. ^ "How Harvard lost Russia | Institutional Investor". Archived from the original on 2016-08-27. Retrieved 2016-05-09.
  18. ^ a b "How Harvard Lost Russia". Institutional Investor. February 27, 2006. Archived from the original on July 5, 2014. Retrieved May 28, 2016.
  19. ^ "Who Taught Crony Capitalism to Russia?". The Wall Street Journal Europe. March 19, 2001. Retrieved 2011-11-11.
  20. ^ "Harvard Defendants Pay Over $31 Million to Settle False Claims Act Allegations, Reports... -- re> BOSTON, Aug. 3 /PRNewswire/ --". Archived from the original on 2013-09-12.

External links

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