Global Finance Initiative: More than dollars and cents

 Beijing World Trade Center
Beijing World Trade Center

By Chris Philipp for the Einaudi Center

There’s much more to finance than dollars and cents. That’s the driving principle behind the Global Finance Initiative at the Mario Einaudi Center for International Studies.

The initiative is a hub for the interdisciplinary exploration of financial theories and systems. It seeks to bring together scholars from a diverse set of disciplines—international relations, political science, anthropology, law, economics, and sociology—and connect their scholarship to financial practice.

“Our goal is to stage a series of conversations with social scientists and professionals about finance and its future,” says GFI founder and Einaudi Center director Hirokazu Miyazaki, who is also the John S. Knight Professor of International Studies and a professor of anthropology at Cornell. Miyazaki’s current research focuses on the public and corporate debt and debt relations in post-Fukushima Japan. His past work has examined the culture of derivatives traders in Japan.

It is a particularly compelling time for such an endeavor, given that the 2008 financial crisis proved that existing theories and scholarship were not working, and could not sufficiently deal with the fallout that happened once the crisis hit.

“Money and finance are especially important in international politics today due to the fact that countries are still dealing with the consequences of the 2007–2008 global financial crisis,” says Jonathan Kirshner, GFI member and the Stephen and Barbara Friedman Professor of International Political Economy at Cornell. His research focuses on the politics of money.

“The very modest reforms that have been enacted by governments in the aftermath of that crisis have not been sufficient to assure financial stability,” he says. “In the United States, Europe, and Asia, domestic and international monetary and financial relations remain highly contested, politicized, and vulnerable to renewed upheaval.”

 London financial district
London financial district

The initiative began in 2013 as a small group of Cornell faculty members who were interested in discussing the ongoing financial crises occurring both regionally and internationally. Many of these original members were already working separately on issues related to global finance, and they understood the value of broadening their analysis and approach to incorporate research from other fields 

Since that time GFI has expanded into an interdisciplinary community of international scholars who engage with practitioners and policymakers about issues confronting the world’s financial markets.

“GFI is populated with experts who are well educated and have sophisticated takes on what is happening in the world’s financial markets,” says member Douglas Holmes, an anthropology professor at Binghamton University who has extensively researched central banking culture in the United States, Germany, and England. “GFI aligns them, and everyone benefits from these rich conversations.”

The initiative also includes graduate students. In fact, an important part of GFI’s mission is to help train a new generation of graduate students in the social science of financial markets. 

GFI supports graduate students, from Cornell University departments across campus, who are examining a wide range of topics related to finance. They receive guidance from the GFI steering committee, visiting scholars, and each other while formulating their research. A monthly speaker series also gives students an opportunity to hear from and engage with global financial experts from both the academy and the professional worlds.

The outcome, according to the students, is better, well-informed research that is useful to practitioners.

“Recognizing these different perspectives makes my work more relevant and interesting to much broader audiences,” says Alicia Eads, a graduate student in the sociology department. Her dissertation examines the federal responses in the United States to the 2008 financial crisis and the housing market collapse.

Finance is a very complex topic—and a good deal of Eads’s work centered on topics that fell outside of the expertise of those in her department—so it was very important, she says, for her to have a group with expertise in finance that she could rely on as a knowledge base.

Peter Wissoker, a graduate student in the Department of City and Regional Planning in the College of Art, Architecture, and Planning, agrees. His dissertation examines the changing nature of the financial system over the last 30 to 40 years, and how that has reshaped real estate development and investment in the United States.

“Being a member of GFI helped me to see my topic as a series of institutional practices that are worth unpacking and examining—to see the mechanisms and the consequences, and to examine the effect on market practices,” he says.

GFI’s graduate student program also includes a working group where students share relevant literature and workshop their papers with each another and GFI committee members.

“GFI has an intensive focus on an interdisciplinary approach,” says Meg Doherty, a graduate student in the sociology department who is looking at how power dynamics influence financial policy. “We are all working on issues of finance and talking to each other helps us to better understand our work.”

Doherty has been selected to participate in GFI’s interdisciplinary graduate student fellowship on the Changing Politics of Central Banking, which is funded in part by the Tobin project. She will join students from Cornell, the New School, Northwestern, and Duke—from the fields of law, sociology, political science, and economics—in surveying the state of knowledge on the question of the politics of central banking. 

Their resulting papers will be presented as an adjoining event to an upcoming GFI conference, the Changing Politics of Central Banking, which will take place in spring 2016. Both the fellowship and the conference are sponsored jointly with Cornell Law School’s Meridian 180 project, a community of top thought leaders from the Asia-Pacific region and beyond who regularly discuss contentious law and policy issues affecting the region.

The two-day conference will place central bankers from around the world in conversation with academic scholars from diverse disciplines. Academics will discuss the limitations of existing theories, as well as meet with banking professionals in closed-door sessions to hear from them about what’s working and what’s not.

The goal is to come away with ideas about what the next research questions should be and to create a list of characteristics that should be included in any new models.

“The way the economy is acting is totally unpredictable. We need a new set of paradigms for how the markets behave and role of the government,” says Annelise Riles, founder of Meridian 180 and a professor of law and anthropology who is also a member of GFI’s steering committee. Her research interests focus on issues surrounding financial regulation. “Right now, mainstream academe is not providing that.”