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Inaugural Professor: Does Finance Really Matter?

Thursday, Nov. 16, 2017

Larry Walther, Frank Caliendo, Ben Blau, Noelle Cockett and Larry Smith.

Larry Walther, senior associate dean; Frank Caliendo, economics and finance department head; Ben Blau, inaugural professor; Noelle Cockett, USU president; and Larry Smith, interim vice president and provost.

Does Finance Really Matter? Ben Blau, Economics and Finance professor at the Jon M. Huntsman School of Business at Utah State University, answered this question at the president’s inaugural lecture on November 7.

Blau argued that since theorists disagree on whether or not finance matters he focused on empirical data. He questioned the effects of stock markets on poverty rates—does financial development disproportionately benefit the poor? If credit constraints are relaxed then income inequality (and subsequently poverty) should be reduced. Additionally, if existing financial services exist and are only used by the wealthy, then, in theory, inequality may increase.  One example from Blau’s research featured the data from a country where a person earning less than USD 1.25 per day is considered below the poverty line. His research showed a standard deviation increase in the liquidity of stock markets resulted in an 18 percent reduction in poverty.

More liquidity in stock markets may entice investors to invest in longer duration projects that could lead to greater growth in their businesses and more opportunities to hire new employees. These actions boost the local economy, showing financial development leads to economic growth and that growth disproportionately helps the poor. Thus answering the question that finance matters with a resounding ‘yes.’

Blau’s research interests include empirical asset pricing, market microstructure and the efficiency of the financial system. He has published nearly 60 articles in top academic journals and in 2010 received the Outstanding Paper award in the Financial Review and, in 2012, the Outstanding Article award in the Journal of Financial Research. His research has been highlighted by several media outlets, such as the Wall Street Journal, SmartMoney Magazine, and Politico.

Blau is not only passionate about research, he loves teaching as well. He has received multiple honors in teaching and mentoring throughout his career. Blau graduated with honors and received a doctorate in finance from the University of Mississippi in 2008 after receiving both his bachelor (finance, 2002) and master (economics, 2005) from Utah State University. Ben and his wife, Lisa, are the proud parents of five children.

Research Contact: Ben Blau, Economics & Finance Department, Jon M. Huntsman School of Business, Utah State University,

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