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Andrei Shleifer

Life

  • Born: February 20, 1961, in Moscow, Soviet Union (now Russia).
  • Education:
    • B.A. from Harvard University in 1982.
    • Ph.D. in Economics from MIT in 1986.
  • Career:
    • Professor of Economics at Harvard University since 1991.
    • Key figure in behavioral finance and institutional economics.
    • Advised governments on privatization and economic reform in the 1990s.
  • Awards:
    • John Bates Clark Medal (1999) for contributions to economic thought.

People Who Influenced Their Thought

  • Robert Vishny: Frequent collaborator on research in finance and governance.
  • Lawrence Summers: Mentored Shleifer and co-authored early work on financial markets.
  • Daniel Kahneman: Behavioral economics insights influenced Shleifer’s work on market inefficiencies.

Main Ideas and Publications

  • Behavioral Finance: Challenged the efficient-market hypothesis, showing how investor psychology affects markets.
  • Institutional Economics: Analyzed how legal systems and governance shape economic outcomes.
  • The Grabbing Hand (1998, with Vishny): Examined government corruption and market distortions.
  • Inefficient Markets (2000): Pioneering work on behavioral finance.
  • Privatization Research: Studied the effects of mass privatization in post-Soviet economies.

Controversies

  • Russia Advisory Role: Accused of conflicts of interest during 1990s privatization (settled with U.S. government in 2005).
  • Criticism of Methods: Some economists questioned the empirical robustness of his behavioral finance models.
  • Political Bias Debates: Work on regulation and governance sometimes seen as ideologically charged.

Key People Influenced by Their Thought

Legacy

Andrei Shleifer reshaped finance and institutional economics by integrating psychology, law, and market analysis, while sparking debates on governance and reform.