I grew up in Dayton, Ohio, and received a bachelor's degree in mathematics and physics from Indiana University. After receiving a doctorate in economics from Yale University, I taught briefly at Princeton University before returning to Yale where I became a tenured Full Professor. I left Yale to join the faculty of Washington University, initially as the John E. Simon Professor of Finance and currently as the Boatmens Bancshares Professor of Banking and Finance. From 2010 through 2021, I ran a research progam each summer in Chengdu, Sichuan, China, where I was the Director of the Institute of Financial Studies at Southwest University of Finance and Economics (西南财经大学金融研究院院长). In 2022, I was awarded the Sveriqes Riksbank Prize in Economic Sciences in Honor of Alfred Nobel, popularly known as the Nobel Memorial Prize in Economics.
Most of my research has provided fundamental theoretical analysis of practical problems. My most famous paper is Diamond and Dybvig (Journal of Political Economy 1983). This paper presents the Diamond-Dybvig model, derived with Doug Diamond at Chicago, which is a pillar of modern banking theory. After forty years, it is still used widely by academics and regulators and is one of the most widely cited papers in the Finance and Economics literatures. Many prominent economists think this is the go-to paper for undertanding financial crises, and some people even claim that it contributed to preventing the 2008 financial crisis from becoming the second Great Depression.
I have always worked on a wide range of topics. My recent work includes work on the anti-corruption campaign in China, preservation of capital for educational endowments, and gambling by firms. My research on asset allocation and spending rules for educational endowments was awarded the first Commonfund Prize for "original research with strong potential to influence practice," and my work with Bill Marshall on pricing long bonds was awarded a Graham and Dodd scroll for excellence in financial writing. In all, I have more than 30 publications in top academic journals.
I pride myself for my commitment to teaching in the Olin School's various programs, and several of my former doctoral students have become prominent scholars.
I served as President of the Western Finance Association and I have held many editorial positions at leading journals. I have also served on Washington University's Investments Committee, on the National Endowment Survey Advisory Committee of the National Association of College and University Business Officers, and as program chair of the SAIF's Summer Institute in Finance conference in China. Currently, I serve on Washington University's Retirement Plan Advisory Committee.
I have done a lot of consulting work over the years, mostly applying quantitative models to practical problems in investments, especially in fixed income and asset allocation. I have also worked on a diverse set of problems, including pricing of a metals derivative offered by a company, examing charges of a violation of anti-dumping agreements, determination of the cost of capital, and determining whether recorded commodoties trades are genuine or just a paper trail created to perpetrate a tax fraud.
In recent years, I have spent a significant time visiting the Far East, mostly China. From 2010 through 2021, I ran a research progam each summer in Chengdu, Sichuan, China, where I was the Director of the Institute of Financial Studies at Southwest University of Finance and Economics (西南财经大学金融研究院院长). I have also visited Singapore Management University, Changjiang Graduate School of Business (CKGSB), Beida (Peking University), Tsinghua University (Beijing), and Ajou University (Seoul, South Korea). I have had shorter visits for seminars or conferences at National University of Singapore, Jiaotong University in Shanghai (at SAIF, the Shanghai Advanced Insitute in Finance), NTU in Singapore, Zhongyang School of Finance and Economics (Beijing), Xiamen University, Sun-Yat Sen University, Hong Kong University, and City University of Hong Kong. I was a keynote speaker at meetings of the Five-star Forum in Beijing and the Chinese Finance Association in Chengdu. I was also a keynote or plenary speaker at other international meetings, including meetings of the Bachelier Society, Northern Finance Association, Midwest Finance Association, Cambridge Corporate Finance Theory Conference, and the Asian Leadership Conference in Seoul..
I have been granted some awards in China including Changjiang Scholar (长江学者), Thousand-person plan (千人计划), Chengdu Jinsha Friendship Award (成都市金沙友谊奖), Sichuan Golden Pinnacle Award (四川金顶奖), and the Chinese Central Government Friendship Award (中国政府友谊奖).
Some of my leisure activities include playing jazz and blues keyboards and playing some traditional instruments such as erhu, hulusi, and baritone ukulele. I also enjoy weightlifting, Taiji, Qigong, Tui Shou (push hands), and walking.