Andrew W. Lo

Charles E. and Susan T. Harris Professor; director, MIT Laboratory for Financial Engineering. Financial economist whose research informed science, practice, and policy decisions of the field. He rejected the random walk hypothesis for U.S. stock prices and challenged the efficient markets hypothesis using formal econometric techniques, with influence on the broader business community. He has also studied the hedge-fund industry and documented compelling evidence of elevated levels of systemic risk in the global financial system prior to the financial crisis. Testifying before Congress, he provided well-informed and feasible recommendations for measuring and managing these risks. More recently, he hypothesizes that behavior is the outcome of both logical reasoning and more primitive behaviors such as fear and greed, and that market dynamics are determined by the balance of these competing forces at both individual and aggregate levels. This theory is capable of reconciling efficient markets with behavioral anomalies through his Adaptive Markets Hypothesis, in which he shows that the most common behavioral anomalies can be explained by natural selection and that markets can oscillate between efficiency and irrationality depending on the nature of the market participants and the environment in which they interact. His most current research involves the application of financial engineering techniques such as securitization and portfolio theory to some of society's biggest challenges including funding for biomedical innovation, revitalizing U.S. manufacturing, and climate change. Co-editor of the Annual review of Financial Economics, associate editor of the Financial Analysts Journal and the Journal of Portfolio Management. Chairman and Chief Investment Strategist, AlphaSimplex Group, LLC. Member, Bureau of Economic Research. Member, Board on Mathematical Sciences and Their Applications, National Academy of Sciences.