The Consequences of Financial Innovation: A Counterfactual Research Agenda

Josh Lerner and Peter Tufano

No 16780, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Financial innovation has been both praised as the engine of growth of society and castigated for being the source of the weakness of the economy. In this paper, we review the literature on financial innovation and highlight the similarities and differences between financial innovation and other forms of innovation. We also propose a research agenda to systematically address the social welfare implications of financial innovation. To complement existing empirical and theoretical methods, we propose that scholars examine case studies of systemic (widely adopted) innovations, explicitly considering counterfactual histories had the innovations never been invented or adopted.

JEL-codes: G20 O31 (search for similar items in EconPapers)
Date: 2011-02
Note: CF PR
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Citations: View citations in EconPapers (65)

Published as The Consequences of Financial Innovation: A Counterfactual Research Agenda , Josh Lerner, Peter Tufano. in The Rate and Direction of Inventive Activity Revisited , Lerner and Stern. 2012
Published as Josh Lerner & Peter Tufano, 2011. "The Consequences of Financial Innovation: A Counterfactual Research Agenda," Annual Review of Financial Economics, vol 3(1), pages 41-85.

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Chapter: The Consequences of Financial Innovation: A Counterfactual Research Agenda (2011)
Journal Article: The Consequences of Financial Innovation: A Counterfactual Research Agenda (2011)
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