All posts by Jim Garven

My name is Jim Garven. I currently hold appointments at Baylor University as the Frank S. Groner Memorial Chair of Finance and Professor of Finance & Insurance. I also currently serve as an associate editor for Geneva Risk and Insurance Review and Journal of Risk and Insurance. At Baylor, I teach courses in managerial economics, risk management, and financial engineering, and my research interests are in corporate risk management, insurance economics, and option pricing theory and applications. Please email your comments about this weblog to

Free Inquiry on Campus

The “Free Inquiry on Campus: A Statement of Principles by a Collection of Middlebury College Professors” document, published in the “Aftermath at Middlebury” is well worth reading and pondering.

On March 2, 2017, roughly 100 of our 2500 students prevented a controversial visiting speaker, Dr. Charles Murray, from communicating with his audience on the campus of Middlebury College.  Afterwards, a group of unidentified assailants mobbed the speaker, and one of our faculty members was seriously injured.  In view of these unacceptable acts, we have produced this document stating core principles that seem to us unassailable in the context of higher education within a free society.

On the importance of “viewpoint” diversity…

I am proud to be a member of the Heterodox Academy (see Heterodox Academy members are all professors who have endorsed the following statement:

“I believe that university life requires that people with diverse viewpoints and perspectives encounter each other in an environment where they feel free to speak up and challenge each other. I am concerned that many academic fields and universities currently lack sufficient viewpoint diversity—particularly political diversity. I will support viewpoint diversity in my academic field, my university, my department, and my classroom.”

Everything important to know about real world personal finance…

Financial versus Mathematical literacy

It is rare when I actually take the time to read Baylor’s student newspaper, the Baylor Lariat, and even rarer when I post a critical response to a Lariat article. However, I couldn’t resist commenting on an editorial from earlier this month entitled, “Baylor should implement class to ready students for real world”. In this editorial, the members of the Lariat editorial board opine that Baylor should require a one-hour credit “Life Skills” course in lieu of a basic math course such as “Ideas in Mathematics”. Basically, such a course would be designed to cover very basic personal finance principles, such as budgeting, paying off student loans, buying insurance, saving for retirement, etc. I think this is a manifestly bad idea; let me explain why.

While I am not aware of an empirical literature concerning mandated personal finance courses at colleges and universities, many states have experimented with personal finance and minimum math requirements at the high school level. A recent (2014) Harvard Business School working paper entitled “High School Curriculum and Financial Outcomes: The Impact of Mandated Personal Finance and Mathematics Courses” provides a thorough empirical analysis of personal finance and minimum math requirements and finds that mandated personal finance courses at the high school level do little to improve outcomes that are generally associated with financial literacy (e.g., such as building wealth through asset accumulation, prudent credit management, etc.), whereas “… individuals who were exposed to greater math requirements in high school are more likely to accumulate assets, have more real estate equity, are less likely to be delinquent on their loans, and are less likely to undergo foreclosure.”

Dow will peak March 23…just after lunch!

Quoting from this CNBC article,

“The Dow Jones Industrial Average… will hit its peak on Wednesday, March 23rd, specifically “after lunch,” Robin Griffiths, the chief technical strategist at the ECU Group told CNBC.”

Such a claim (based on so-called “technical analysis” (cf. is total and utter nonsense.  It would appear that the signal-to-noise ratio for this article specifically and much of CNBC content, in general, is close to zero.

Stocks have entered bear market territory, and any rallies from here are just opportunities to sell — not buy, a number of analysts have told CNBC.|By CNBC

Bank of Japan Introduces Negative Interest Rates

The Bank of Japan’s (somewhat counterintuitive) stated goal for implementing it’s new (negative interest rate) policy is “…to push down borrowing costs to stimulate inflation”. While I certainly do not claim or pretend to be a monetary economist, a policy that punishes savers and rewards borrowers doesn’t seem like a particularly good script for long-term economic success. I think it’s a tacit acknowledgment that the Japanese economy is struggling with deflation.  See for the official policy statement issued by BOJ…

BOJ Introduces Negative Interest Rates for First Time|By Takashi Nakamichi and Megumi Fujikawa

Misbehaving: The Making of Behavioral Economics

Myron Scholes Forum, October 13, 2015

Richard Thaler, Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at Chicago Booth, has spent his career studying the radical notion that the central agents in the economy are humans—predictable, error-prone individuals. He will discuss his latest book—Misbehaving: The Making of Behavioral Economics—in a Scholes Forum fireside chat, moderated by Steven Kaplan, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance at Chicago Booth.

View video>

As Interest Benchmarks Go Negative, Banks May Have to Pay Borrowers

I never thought that I would ever live to see the day when interest rates turned negative, creating a world where investors pay for the opportunity to lose money over time and banks pay interest to borrowers…

As Interest Benchmarks Go Negative, Banks May Have to Pay Borrowers

“As Euribor, a key benchmark used to set interest rates, seems to sliding toward zero and below, banks in some European countries are looking at previously inconceivable problem: They may soon have to pay interest to customers who borrow from them.”