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0:00
My name is Lawrence J. White.
I'm a professor of economics
at the Stern School of Business,
New York University
and I want to talk about
technological change,
financial innovation
and diffusion
in international banking.
0:22
I'd like to start my talk
with three quotations.
The first is by a Nobel prize
winning economist,
Merton Miller,
who back in 1986 wrote that,
"The word 'revolution'
is entirely appropriate
for describing the changes
in financial institutions
and instruments
that have occurred
in the past 20 years."
So here's Merton Miller,
this Nobel prize winning
economist as of 1986,
looking back
over 20 years saying,
"Look at all the things
that have happened.
Look at all the changes.
It's a revolution."
And he was right.
The problem is that even though
everybody knows he's right,
it's very hard
actually to document this
and it was true back in 1986,
it turns out to be still true
almost 30 years later.
And so, to remind us
of this phenomenon,
my next quotation
attributed to Mark Twain.
"Everybody talks about
the weather,
but nobody
does anything about it."
And little over a decade ago,
a co-author of mine,
W. Scott Frame and I
wrote the phrase,
"Everybody talks about
financial innovation,
but almost nobody
empirically tests
hypotheses about it."
We know it's there
but it's real hard to document
what's going on.
