A New Product That Pays For College

Like other new goods and services that people invent, the Income Sharing Agreement (ISA) is a financial innovation that pays for college tuition.

The Impact of Financial Innovation

We could say that two events in 1973 changed financial markets. The CBOE (Chicago Board Options Exchange) starts trading. The Black-Scholes Model for pricing options (most simply the right to buy or sell a security at a future date) was published.…

Weekly Roundup: From Chinese Cement to Bowie Bonds

This week’s economic news summary included David Bowie’s financial innovation, China’s GDP cement problems, inequality contradictions and farm productivity.

David Bowie’s Financial Innovation

A financial innovation, David Bowie Bonds get present payment of future royalties by backing bonds with a guaranteed royalty revenue stream.

JPMorgan Chase and Financial Innovation

In Boca Raton, Florida, during the early 1990s, a group of JP Morgan bankers gathered for an “offsite” weekend. Have some fun, get some sun, do some brainstorming. They had hoped to create a new product. And they did. Their…

A One-Handed Economist?

Let’s not look at CDOs, SIVs, ARMs, TIPs or ATMs. Nor do we need specifically to consider credit default swaps, securitization, hedge funds or venture capital. Instead, we can go to the question that Robert Litan asks at the end…

New Financial Products

Instead of a garage or a laboratory, think of an office or a conference room. And, rather than a computer or an aircast, imagine a junk bond or a bank account.  All of these products, at one time were invented.…