FINANCIAL-MARKETS AND SOCIAL-WELFARE

This article is a transcript of the author's speech made in commemoration of her appointment as a professor. The author discusses the role of the financial markets in the economy and their effect on welfare, Well-developed financial markets, with a great variety of financial instruments tend to spread the risks and develop ways of hedging against risks. Studies have shown that well-developed financial markets in fact can increase social welfare and thus the Government should promote the development of efficient financial markets.