William N. Goetzmann

Edwin J. Beinecke Professor of Finance and Management Studies
Director, International Center for Finance at the Yale School of Management

William Goetzmann is the Edwin J. Beinecke Professor of Finance and Management Studies and the Director of the International Center for Finance at the Yale School of Management, where he has been since 1994. He has taught investments, real estate and financial history among other classes. From 1990 to 1994 he taught investments and real estate at Columbia Business School.

Goetzmann is an expert on a diverse range of assets, including stocks, bonds, mutual funds, hedge funds, real estate and art. His research topics include asset pricing, the equity risk premium, arbitrage strategies, selecting investment managers, global investing and financial history. His work has been featured in most of the major financial news publications and his academic research has been published in all of the major academic finance journals.

His published books include: The Origins of Value: The Financial Innovations that Created the Modern Financial Markets (Oxford, 2005), The Equity Risk Premium: Essays and Explorations with Roger Ibbotson. (Oxford, 2006), Modern Portfolio Theory and Investment Analysis, with Elton, Gruber & Brown, (John Wiley and Sons, 2006 and following) and The West of the Imagination, with W.H. Goetzmann, (Oklahoma, 1986 & 2009). His most recent edited volume is The Great Mirror of Folly, Finance, Culture, and the Crash of 1720 (Yale University Press, forthcoming).

His current work focuses on endowments, financial history, operational risk, securitization, credit risk and behavioral finance.


Academic Vitae

Outside Activities, Consulting and Director Relationships

Published research and working papers available at SSRN

International Center For Finance at the Yale School of Management

The mission of the ICF is to promote research about, and development of, financial tools and skills for the benefit of society. It supports experiential learning and student engagement with current topics in Finance.

Money Changes Everything

William N. Goetzmann. Princeton Press

My new book, Money Changes Everything, argues that the development of finance has made the growth of civilizations possible. Finance is a peculiar technology developed by humankind that allows us to move value forwards and backwards through time. This innovation has changed the very way we think about and plan for the future. Finance was present at key moments in history: driving the invention of writing in ancient Mesopotamia, spurring the classical civilazations of Greece and Rome to become great empires, determining the rise and fall of dynasties in imperial China, and underwriting the trade expeditions which led Europeans to the New World. This book traces the development of finance from its most ancient origins up through modern times and links it to the broader evolution of complex societies.

Errata for Money Changes Everything


The Great Mirror of Folly: Finance, Culture, and the Crash of 1720

William N. Goetzmann, Catherine Labio, K. Geert Rouwenhorst and Timothy Young (Editors), Robert Shiller (Foreword). Yale University Press, Yale Series in Economic and Financial History

My colleagues and I edited a volume about the first global financial crisis and the book that recorded it. The world’s first global stock market bubble suddenly burst in 1720, destroying the dreams and fortunes of speculators in London, Paris, and Amsterdam virtually overnight. Their folly and misfortune inspired the publication of an extraordinary Dutch collection of satirical prints, plays, poetry, commentary, and financial prospectuses entitled, Het groote Tafereel de Dwaasheid (The Great Mirror of Folly), a unique and lavish record of the financial crisis and its cultural dimensions. The current book adopts the title. It is a book about the book, a wide-ranging interdisciplinary collaboration that uncovers the meaning and influence of the Tafereel and the profound, lasting, and multifaceted impact of the crash of 1720 on European cultures and financial markets.


The Equity Risk Premium: Essays and Explorations

Roger Ibbotson and I have assembled our separate and co-authored research papers related to the equity risk premium into a volume. We have added additional new work and interpretive material.


The Origins of Value: the Financial Innovations that Created Modern Capital Markets Geert Rouwenhorst and I have edited a volume of essays for the International Center for Finance published by Oxford University Press. It contains chapters by leading historians and economists on key innovations in finance from earliest times to the present. It is based on a series of conferences on financial history at the International Center for Finance at the Yale School of Management. It draws significantly from the new History of Finance Collection, a joint venture between the Yale Beinecke Library and the Yale School of Management’s International Center for Finance. Find the book at Oxford University Press. Buy it on Amazon or Barnes and Noble. Hear the Marketplace Interview about The Origins of Value. Also, here are the reviews: The Times, Time Magazine, Financial Times, Barron’s The Best Books of 2005 Frankfurter Allgemeine, The Times Higher Education Supplement, Financial Innovation
More Social Security, Not Less is a proposal to re-invent social security to meet the needs of all Americans. It argues for the transition of the U.S. Social Security Fund to a growth-oriented portfolio and offering additional annuities at a price that will support the basic social security contract. The 2005 working paper contains the basic proposition and is free to download here and here. The 2008 published version is also here.

Financial History at the International Center for Finance

The ICF has been constructing databases of individual security prices in global markets over the 19th and 20th centuries. These data are available for downloading at the ICF website. Now available:


Old New York Stock Exchange Project – contains monthly individual NYSE stock prices from 1816 to 1926 and annual dividend data for much of the same period. See: A New Historical Database For The NYSE 1815 To 1925: Performance And Predictability for a data description and some evidence on predictability.


London Stock Exchange Project – The Investors Monthly Manual contains a complete record of The London Exchange for the period from 1869 to 1930. Monthly individual securities data in spreadsheet form may be downloaded here. It includes corporate securities, sovereign and municipal debt from all over the world.


St. Petersburg Stock Exchange Project – Monthly data for all equities on the St. Petersburg Exchange, 1865 to 1917. Pdf files of hard copy in Russian are available.


Shanghai Stock Exchange Project – Monthly data for all equities on the Shanghai Stock Exchange, 1870 to 1940.


Great Mirror of Folly Data Project: The Global Financial Crisis of 1720 in London, Paris and the Netherlands: 1720. Geert Rouwenhorst, Rik Frehen and I have collected stock price and subscription data for the Dutch global markets in 1720, and additional data for the British markets. It is complementary to Larry Neal’s and Francois Velde’s data. Our working paper New Evidence on the First Financial Bubble is available on ssrn.


Global Stock Markets in the Twentieth Century. Philippe Jorion and I have collected a database of capital appreciation indexes for 39 markets going back to the 1920s. Readme file.

US dollar stock price appreciation indices #1/2US dollar stock price appreciation indices #2/2Real stock price appreciation indices #1/2Real stock price appreciation indices #2/2




Current Research Projects


My working papers can be downloaded from SSRN. My recent research projects include:


Testing Asset pricing theory on six hundred years of stock returns: Prices and dividends for the Bazacle company from 1372 to 1946, with David Le Bris, Sebastien Pouget, and William N. Goetzmann.

The Development of Corporate Governance in Toulouse: 1372-1946, with David Le Bris, Sebastien Pouget, and William N. Goetzmann.

The Role of Hedge Funds in the Security Price Formation Process, with Charles Cao, Yong Chen, William N. Goetzmann and Bing Liang.

Investment Beliefs of Endowments, with Andrew Ang, Andres Ayalaand William N. Goetzmann.

Estimating Private Equity Returns from Limited Partner Cash Flows, with Andrew Ang, Bingxu Chen, William N. Goetzmann and Ludovic Phalippou.

The Dow Theory

Stephen Brown, Alok Kumar and I have studied the performance of the Dow Theory over the period 1903 to the present. Using the editorials of William Peter Hamilton, we simulated the investment return achieved by someone who followed the theory. In addition, we used neural net methods to “extract” the theory from Hamilton’s editorials, and test it out of sample. The working paper may be downloaded, and the published version appeared in the August, 1998 volume of the Journal of Finance. This site is a resource area for information about our analysis and the more recent Dow Theory performance.

Hedge Funds

A course offered at Yale School of Management by myself and (often) Tanya Styblo Beder. An in-depth study on the theory and management of hedge funds. We focus on their strategies, including M&A arbitrage, market neutral investing, statistical arbitrage, fixed income arbitrage, global macro arbitrage and derivatives arbitrage. Topics will include hedge fund compensation, performance evaluation, risk management, including operational risk, and the role of arbitrageurs in the capital market.

Democracy before Debt

My contribution to the Yale School of Management Leaders Forum opinion page. For related links on the issue of debt and democracy, see a synopsis of the doctrine of “Odious Debt” at Probe International. For a current list of outstanding global debt by country, see Joint BIS-IMF-OECD-World Bank statistics on external debt. Try cross-tabulating this with The Freedom House Annual Survey of Political Rights and Civil Liberties. Another useful site for evaluating perceptions of governmental corruption is Transparency International. The Internet Center for Corruption Research provides more details about the sources of information and the scoring methods used to construct the corruption index, and research articles about corruption.

Mutual Fund Styles

A mutual fund database created via a new methodology developed with Stephen J. Brown of the Leonard Stern School of Business at NYU for classifying money managers according to their investment style. Brown and Goetzmann styles for all U.S. equity mutual funds are reported in this alphabetically searchable database.

Valuation and Investment

This is the electronic resource area for the core course Valuation and Investment. The following WWW pages contain: class notes and outline, A dictionary of financial terms, links for career research in finance and much more. For Masters-level job hunters, take a look at Jobs in Finance and Real Estate

Empirical Methods

This is the electronic resource area for Empirical Research in Accounting and Finance Methods and Current Topics, taught by myself and Jake Thomas.

Mutual Funds

This is the electronic resource area for the course Mutual Funds, taught by myself and Joseph Lennon.

Endowment Management

This is the electronic resource area for Endowment Management, a half-semester course that focuses on the special challenges facing the endowment fund manager. These include evaluating the role of the endowment, portfolio choice, manager choice, socially responsible investing, and the use of alternative asset classes.

Portfolio Management

This is the electronic resource area for Portfolio Management — formerly called “Investments.” The following WWW pages contain a hyper-syllabus and links to investment cases.

An Introduction to Investment Theory

A hyper-text book for first-year MBA and MPPM students introducing the basic models of investment theory. Designed to be used in an eight-week first course in investments.

The History of Finance and Capital Markets


A Yale College and MBA course based on documentary resources at Yale and beyond. Often taught with my colleague Valerie Hansen, the course meets in Yale’s Beinecke Library and makes extensive use of the financial history collection. Overview, People, Readings, On-line Resources, Syllabus, Virtual Museum of Financial History. The virtual museum is a work in progress and contributions and comments are welcome.


Cases in Investment Management

Text for nine cases in investment management designed to teach analytical and quantitative skills. The cases are designed for use with spreadsheet data, and/or Morningstar/Ibbotson Associates EnCorrOptimization software. If you are interested in licensing the backup materials for classroom use, please contact me. If you wish to use the cases for classroom purposes, please link them rather than copying them.

Real Estate Finance

A second level course in real estate economics and finance.

The West of the Imagination The latest edition from Oklahoma University Press, 2009.

We have added several new chapters to our book. Additions include chapters on McKinney and Hall, The Land Artists, New Western Photographers and much more. The West as seen through the eyes of artists is the West of the imagination. This book is a comprehensive survey of the iconlogy of the Western Frontier in the popular and high arts in America.

Henry Lowenfeld’s Investment and Exact Science published in Londonin 1909 developed the first complete theory of international diversification. It is worth reading to understand how British investors of the last century thought about risk. Right is the image Lowenfeld used to show the idea of co-movement within a single market. The book is out of copyright, so feel free to download it here. Thanks to Andrey Ukhov for rediscovering Lowenfeld’s pioneering work in Yale’s Mudd Library. Also by the same author: Investment Practically Considered, and All About Investment.

Will Goetzmann’s Learning Curves

Graphs, cartoons, book covers, and everything else. This is a collection of graphs and finance-related images that capture the essence of finance and finance pedagogy. An entertaining way to explore!

The Artists of Fortune (DISABLED)

An exhibition of cover art from pre-war Fortune, one of the greatest experiments in business publishing ever undertaken.

Galileo.s Financial Calculator

In 1606, Galileo published this guide to a calculation device of his own design called a geometric and military compass. Among the various uses of the device is the calculation of compound interest. The Institute and Museum of the History of Science in Florence has a full description of the tool. Click on the document at right for the complete text see operation VII.

Snow Spiral: An Environmental Project.
Michael Edelstein’s book Overseas Investment in the Age of High Imperialism is the first major study to use modern portfolio theory to examine the question of British overseas investment. His work is based on the construction of time series indices from the Investors Monthly Manual. He has generously made the data appendices from his book available for download through the website of the International Center for Finance at the Yale School of Management.

Bibliography of Literature on Art Museums

Carl Willers, MPPM class of 1996 has assembled an in-depth bibliography of books and articles about the management of Art Museums. This is a useful resource for all managers in the arts.

A Portfolio of Paintings of Egypt

Some paintings of classic Egypt views. Feel free to link them, but do not download, since they are copyrighted.

The Entemena Inscription in the Yale Babylonian Collection

is the oldest known example of compound interest calculation. It dates from about 2,500 BCE and commemorates the defeat of the city of Umma by the city of Lagash. Lagash claims reparations for decades of occupation of the agricultural land along the border. The reparations are calculated by compounding at 33 1/3 percent per year.

Finance in the Oxyrhnchus Papyri: An early bank check?

Document 2772 in The Oxyrhnchus Papyri volume XXXVI is entitled, Instructions to a Banker. Written in 10 or 11 A.D., it is part of the famous trove of papyri documents discovered in Egypt in the last century and now in the process of preservation and translation at OxfordUniversity. See POxy (Oxyrhynchus Online).

Translation: Julius Lepos to Archibius the banker greeting. Pay to my account with Harpochration the banker one thousand nine hundred and fifty three drachmas of silver. Total 1953 dr year 40 of Caesar, Pachon 3.

The text suggests that Julius and Harpochration both have accounts with the banker Archibius and Julius is instructing the transfer from one account to the other. It is one of a number of diagraphs from papyri collections.

Hawara Documents

The Arcadian Landscapes of Edward Sheriff Curtis

An essay for a Whitney Museum exhibition, The Perpetual Mirage: Photographic Narratives of the Desert West. The photographs of Edward Curtis helped reshape the image of southwestern tribes in the American imagination. See also “Desolation is the Great Basin: Clarence King’s Fortieth Parallel Survey” by my father, historian William H. Goetzmann. This essay, which focuses on the documentary photography of Timothy O’Sullivan, also appears in the Whitney catalogue.

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1995 by Will Goetzmann.
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