The Power of Financial Innovation

24 Pages Posted: 28 Mar 2024

See all articles by Boris Vallee

Boris Vallee

Harvard Business School - Finance Unit

Date Written: February 27, 2024

Abstract

This paper articulates the research and case studies I have produced on how, when, and why financial innovation is beneficial or harmful to society. Based on a broad set of innovations, it highlights three unifying insights. First, financial innovations are not inherently good or bad, as their effects largely depend on its user’s intention. Second, to evaluate a financial innovation one must pin down the way it interacts with a fundamental friction in the economy. Last, financial innovation, even when implemented with good intention and effectively mitigating or leveraging a core friction, can create detrimental effects if its broader impacts are not carefully monitored.

Suggested Citation

Vallee, Boris, The Power of Financial Innovation (February 27, 2024). Available at SSRN: https://ssrn.com/abstract=4741077 or http://dx.doi.org/10.2139/ssrn.4741077

Boris Vallee (Contact Author)

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States

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