Last modified: Thursday, August 11, 2005
IU's Kelley School to co-host conference on market bubbles with Review of Financial Studies
FOR IMMEDIATE RELEASE
AUG. 11, 2005
EDITORS: The conference is closed to the public, but reporters are welcome. A complete schedule is available at the conference Web site at http://www.kelley.iu.edu/finance/RFSIU/conference.htm.
BLOOMINGTON, Ind. -- Indiana University's Kelley School of Business will co-host a national conference with the Review of Financial Studies -- one of the top journals in the field -- on recent financial market bubbles on Friday and Saturday (Aug. 12-13).
The conference, which is not open to the public, will focus on bubbles such as the briefly authoritative and widely cited Internet stock index, ISDEX. ISDEX rose in value from 100 in January 1996 to 1,100 in February 2000 -- an increase of about 1,000 percent in four years -- only to fall to 600 by May 2000, a dramatic decrease of about 45 percent in four months.
"Among big rises and falls in the history of stock market prices, this episode ranks among the most spectacular," said Utpal Bhattacharya, the James R. Hodge Eminent Scholar and associate professor of finance at IU, who is organizing the conference with Xiaoyun Yu, assistant professor of finance at IU.
Michael C. Jensen, the Jesse Isidor Straus professor emeritus of business administration at Harvard University, will be the keynote speaker. Jensen's 1976 paper on the manager-shareholder conflict is one of the most-cited papers in the social sciences and is the conceptual foundation on which cases such as those against Enron and Worldcom rest.
Bhattacharya said the conference will address the three questions:
- Was it a bubble?
- What caused it?
- Did it matter or have any real effects on corporations and the social welfare of the general public?
In addition to several Kelley finance professors, faculty from Harvard University, Cornell University, Duke University, Massachusetts Institute of Technology, Princeton University, the University of Chicago and Yale University are on the program committee.
Twelve papers being presented were selected from 106 papers submitted by scholars from 26 U.S. states, 17 countries and five continents. They represent the full spectrum of finance -- asset pricing, corporate finance, international finance, market microstructure, behavioral finance, experimental finance, real estate and banking.
"It is quite astounding to see how the power of an idea -- bubbles -- can unite so many academics from such diverse backgrounds," Bhattacharya said.