Gary Gorton

Gary B. Gorton (age 57 in 2008) is an American economist who currently serves as professor at Yale School of Management. He is a central figure in the study of the global financial crisis of 2008–2009.[1]

Life and career

Gorton earned his Bachelor of Arts degree from Oberlin College in 1973. He has three Master's Degrees: University of Michigan in 1974, Cleveland State University in 1977, and University of Rochester in 1980. He earned his Ph.D. from University of Rochester in 1983.

Gorton is an expert in stock and futures markets, banking, and asset pricing. He is editor of the Review of Economic Studies.

AIG Financial Products sponsored a major study on the historical performance of commodity futures by Gorton and K. Geert Rouwenhorst.[2]

AIG's financial products division employed Gorton's models in calculating insurance rates for credit default swaps on residential mortgage-based collaterized debt obligations. [3] Gorton assured AIG managers that the models were sufficiently "robust" to maintain accurate CDS insurance rates even in adverse economic situations.[4] AIG's reliance upon his predictions contributed to the company's multi-billion dollar losses in the subprime mortgage crisis.

References

  1. ^ Mollenkamp, Carrick, Serena Ng, Liam Pleven and Randall Smith (November 3, 2008). Did a computer flaw nearly wreck AIG? The Wall Street Journal
  2. ^ AIG Financial Products Corp. Releases Innovative Academic Research on Commodities, Business Wire, July 11, 2007
  3. ^ Roger Lowenstein,The End of Wall Street, p. 54. (Penguin Press, 2010)
  4. ^ Carrick Mollenkamp et al., "Behind AIG's Fall: Risk Models Failed to Pass Real-World Test," Wall Street Journal, October 31, 2008.

External links