Author Archives: Thomas Coleman

About Thomas Coleman

Thomas S. Coleman is Senior Advisor at the Becker Friedman Institute for Research in Economics and Adjunct Professor of Finance at the Booth School of Business at the University of Chicago. Prior to returning to academia, Mr. Coleman worked in the finance industry for more than twenty years with considerable experience in trading, risk management, and quantitative modeling. Mr. Coleman earned a PhD in economics from the University of Chicago and a BA in physics from Harvard College.

Natural Rate Vignette

16 December 2013 Link to .pdf PEOPLE: Milton Friedman, Edmund Phelps RELATED: Phillips Curve, Taylor Rule, Inflation as a Monetary Phenomenon DATES: Milton Friedman and Edumnd Phelps published this in various papers in 1967 and 1968. CHICAGO: Milton Friedman is … Continue reading

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Permanent Income Vignette

16 December 2013 Link to .pdf PEOPLE: Milton Friedman RELATED: Consumption Smoothing, Lifecycle Consumption, Consumption Function DATES: Milton Friedman published A Theory of the Consumption Function in 1957. CHICAGO: Milton Friedman is one of the best-known economists to have taught at University … Continue reading

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Human Capital Vignette

Link to .pdf version PEOPLE: Gary Becker, T.W. Schultz, Jacob Mincer, and many others RELATED: Economics of the Family; Household Production DATES: Gary Becker published Human Capital in 1964 CHICAGO: Gary Becker earned his PhD from Chicago in 1955. After teaching at … Continue reading

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JP Morgan “London Whale” series by Lisa Pollack

I discuss the JP Morgan “London Whale” credit derivatives trading loss in my “Practical Risk Management Course” at the University of Chicago Booth School of Business. I found Lisa Pollack’s discussion of the background and details invaluable. The following is … Continue reading

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Lamia Gurdleneck – “it’s what you do with the figures that matters”

In the frontispiece of my risk management books I have a quote that sums up a fundamental truth about quantitative risk management: It’s not the figures themselves, it’s what you do with them that matters” I included the quote because … Continue reading

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Milton Friedman’s Scientific Legacy

I wrote the following for the celebration of Friedman’s centenary by the Becker Friedman Institute in November 2012. By any measure, Milton Friedman has had a tremendous impact on our world. Friedman is one of the most recognizable economists of … Continue reading

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What is the link between VIX and VaR?

VaR is Value at Risk – a concept widely used (and miss-used) in financial risk management. VIX is the Volatility IndeX, a measure of the implied volatility of S&P 500 index options. (Legally, it is a trademarked ticker symbol for … Continue reading

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Managing financial risk and the limitations of quantitative modeling

John Kay in a 2011 column says that the management of risk is “almost entirely a matter of management competence, well-crafted incentives, robust structures and systems, and simplicity and transparency of design.” (“Don’t blame luck when your models misfire” Wednesday … Continue reading

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Marginal Contribution to VaR for Simulation

Last week I was talking to a group of risk professionals and advocating marginal contribution to risk when someone asked “what about calculating marginal contribution to VaR for historical or Monte Carlo simulation?” (NB – we’re talking here about Litterman’s … Continue reading

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Thinking Probabilistically – HIV screening in the U.S. and South Africa

How can the same HIV test and screening process have the dramatic differences that show up between the U.S. and South Africa? Thinking carefully about probability is so often useful in our every-day lives. I was reminded of this once … Continue reading

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