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John Geanakoplos

James Tobin Professor of Economics

John Geanakoplos is the James Tobin Professor of Economics and Chair of Hellenic Studies at Yale University. He has been Chair of the Yale Faculty of Arts and Sciences Senate and was Director of the Cowles Foundation for Research in Economics for 9 years. He was twice Director of the Economics Program at the Santa Fe Institute and later Chair of the Science Steering Committee for the Santa Fe Institute. He was Managing Director of Fixed Income Research at the investment bank Kidder Peabody and one of the founders of the hedge fund Ellington Capital Management, where he remains a partner. He is a Fellow of the American Academy of Arts and Sciences and the Econometric Society, and a recipient of the Samuelson Prize. He has testified several times in Congress about mortgage debt forgiveness. He graduated summa cum laude from Yale University with a BA in Mathematics in 1975, and received his MA in Mathematics and his PhD in Economics at Harvard under Ken Arrow and Jerry Green in 1980. He won the 1970 United States Junior (under 21) Open Chess Championship.

Geanakoplos was an inventor of collateral general equilibrium and the leverage cycle (1997, 2003, 2008, 2010), which then became one of the leading explanations of the subsequent 2008 global financial crisis. He has collaborated for many years on this subject with Ana Fostel, and also Bill Zame and David Rappoport. His proof (1986) with Herakles Polemarchakis that financial equilibrium with incomplete markets is generically constrained inefficient is a fundamental explanation for why government interventions in the macroeconomy can be good policy. His “original sin” explanation (1998, 2000) with Olivia Mitchell and Steve Zeldes for the now-impending bankruptcy of social security, which won him the Samuelson Prize, he hopes may yet become the basis for real social security reform. His concepts of strategic substitutes and strategic complements (1985) with Jeremy Bulow and Paul Klemperer have become standard terminology in game theoretic analyses of oligopoly. His notion of psychological games (1989) with David Pearce and Ennio Stacchetti has created a small but growing subfield of game theory, with journal issues devoted entirely to developments appearing on its 20th anniversary and its 30th. He has written many papers on monetary equilibrium and default with Pradeep Dubey, with whom he is also working on games of status.