Andrei Shleifer

Andrei Schleifer is a Harvard University professor and financial and behavioral economist.  Past winner of the John Bates Clark Medal, given to top economists under age 40, Dr. Schleifer is a member of the vaunted Harvard-MIT axis of economic thinkers. Shleifer is frequently in the top rankings of economists according to criteria such as the number of published works, number of citations and number of journal pages.

Dr. Shleifer, born in Russia in 1961, earned an undergraduate degree from Harvard and a Ph.D. from MIT. After teaching stints at Princeton and University of Chicago, he became part of the Harvard faculty. In 1991 he took an advisory role with the Russian government, helping to lead the country's economic reform after the collapse of the Soviet Union. At the same time, Harvard was sought out by the U.S. government to advise the Russian government. Shleifer's involvement with both Harvard and the Russian government culminated many years later in a conflict of interest scandal involving personal gains from investments in Russian securities. After an investigation, both Harvard and Schleifer were forced to pay fines in 2005 to bring the matter to an end. He lost his honorary title at Harvard but retained his tenure.

Dr. Schleifer is a prolific researcher and writer. Investopedia readers of this entry will be interested in a recent paper, "Bubbles for Fama," (Journal of Financial Economics, October 2017) which he co-authored with Robin Greenwood and Yang You. Based on almost 90 years of U.S. industry asset return data and 30 years of international data, Schleifer and his co-researchers conclude that Eugene Fama is "correct in that a sharp price increase of an industry portfolio does not, on average, predict unusually low returns going forward," and that "such sharp price increases predict a substantially heightened probability of a crash..." These conclusions, particularly the latter one, can be useful over and over to investors who are inclined to bubble-watching and market-timing.