Professor Hubbard is a specialist in public finance, managerial information and incentive problems in corporate finance, and financial markets and institutions. He has written more than 90 articles and books on corporate finance, investment decisions, banking, energy economics and public policy, including two textbooks, and has co-authored Healthy, Wealthy, & Wise: Five Steps to a Better Health Care System. In a recent book, Tax Policy and Multinational Corporations, he argues that U.S. tax policy significantly affects financing and investment decisions of multinational corporations. Hubbard has applied his research interests in business (as a consultant on taxation and corporate finance to many corporations), in government (as deputy assistant of the U.S. Treasury Department and as a consultant to the Federal Reserve Board, Federal Reserve Bank of New York and many government agencies) and in academia (in faculty collaboration or visiting appointments at Columbia, University of Chicago and Harvard).
Question: A lot of people criticized business schools for contributing to the crisis. What do you think?
Glenn Hubbard: Well if I were to look at the problem of what went wrong in the financial crisis and link it to business schools, there are many causes for the financial crisis, but I think one of them was a set of business leaders who couldn’t connect, or wouldn’t connect the dots. By which I mean, a lot of what was going on in the world was plainly in front of people’s face, the mis-pricing of risk, the global factors that were involved. But many business leaders were so expertly focused on narrow areas, they didn’t see that that big picture. I’m not sure I would describe that as arrogance, I’m not sure I would describe it as a lack of integrity. I would describe it more as a lack of historical context and global context. And I think that’s something business schools could do a better job at. Something we’re trying to very much at Columbia.
Question: How are business schools changing their curriculum in light of the economic lessons of the financial crisis? (Dan Indiviglio, The Atlantic Business Channel)
Glenn Hubbard: Well even before the crisis, we had implemented a new curriculum that brought in a sense more of financial history and business history and of international trends, so we were doing that before. After the crisis, we really focused this a lot by giving students much more of a sense of perspectives across disciplines in their classes with an idea toward getting them to think in a bigger picture way. I think it’s too easy to go to business school and become an expert in something, finance, accounting, operations, whatever interests you without thinking about the very broad platform for leadership. But I do think that was part of the financial crisis. I don’t think it was most of it, but I think it was part of it.
Recorded on December 17, 2009