Hyun Song Shin () is a South Korean
economic theorist
An economist is a professional and practitioner in the social science discipline of economics.
The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...
and financial economist who focuses on
global games
In economics and game theory, global games are games of incomplete information where players receive possibly-correlated signals of the underlying state of the world. Global games were originally defined by Carlsson and van Damme (1993).
The mo ...
. He has been the Economic Adviser and Head of Research of the
Bank for International Settlements
The Bank for International Settlements (BIS) is an international financial institution owned by central banks that "fosters international monetary and financial cooperation and serves as a bank for central banks".
The BIS carries out its work thr ...
(BIS) since May 1, 2014.
Previously, he was the Hughes-Rogers Professor of Economics at
Princeton University
Princeton University is a private university, private research university in Princeton, New Jersey. Founded in 1746 in Elizabeth, New Jersey, Elizabeth as the College of New Jersey, Princeton is the List of Colonial Colleges, fourth-oldest ins ...
since 2006, though he took a leave in December 2009 to advise South Korean President
Lee Myung-bak
Lee Myung-bak (; ; ; born 19 December 1941) is a South Korean businessman and politician who served as the 10th president of South Korea from 2008 to 2013. Before his presidency, he was the CEO of Hyundai Engineering and Construction, and the ma ...
on the
international economy as well as help set the agenda for the
G-20 Seoul summit in November 2010.
Education and career
Shin obtained a
B.A.
Bachelor of arts (BA or AB; from the Latin ', ', or ') is a bachelor's degree awarded for an undergraduate program in the arts, or, in some cases, other disciplines. A Bachelor of Arts degree course is generally completed in three or four years ...
in
philosophy, politics and economics at
Oxford University
Oxford () is a city in England. It is the county town and only city of Oxfordshire. In 2020, its population was estimated at 151,584. It is north-west of London, south-east of Birmingham and north-east of Bristol. The city is home to the ...
(
Magdalen College
Magdalen College (, ) is a constituent college of the University of Oxford. It was founded in 1458 by William of Waynflete. Today, it is the fourth wealthiest college, with a financial endowment of £332.1 million as of 2019 and one of the st ...
) in 1985, an
MPhil
The Master of Philosophy (MPhil; Latin ' or ') is a postgraduate degree. In the United States, an MPhil typically includes a taught portion and a significant research portion, during which a thesis project is conducted under supervision. An MPhil m ...
in economics from Oxford's
Nuffield College
Nuffield College () is one of the constituent colleges of the University of Oxford in England. It is a graduate college and specialises in the social sciences, particularly economics, politics and sociology. Nuffield is one of Oxford's newer co ...
in 1987, and a
DPhil
A Doctor of Philosophy (PhD, Ph.D., or DPhil; Latin: or ') is the most common degree at the highest academic level awarded following a course of study. PhDs are awarded for programs across the whole breadth of academic fields. Because it is a ...
in economics from Oxford's Nuffield College in 1988. Shin became a research fellow in 1988 and tutorial fellow in 1990 at Magdalen College, Oxford.
In 1994 he moved to the
University of Southampton
, mottoeng = The Heights Yield to Endeavour
, type = Public research university
, established = 1862 – Hartley Institution1902 – Hartley University College1913 – Southampton University Coll ...
, where he became a professor of economics. He moved back to
Oxford
Oxford () is a city in England. It is the county town and only city of Oxfordshire. In 2020, its population was estimated at 151,584. It is north-west of London, south-east of Birmingham and north-east of Bristol. The city is home to the ...
in 1996 as a university lecturer in economics and faculty fellow in economics at Nuffield College. In 2000 he became a professor of finance at the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 millio ...
. In 2006 he moved to Princeton University.
In addition to his academic positions, Shin served as an advisor to
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of ...
(2000–2005) and is a member of the Financial Advisory Roundtable at the
Federal Reserve Bank of New York
The Federal Reserve Bank of New York is one of the 12 Federal Reserve Banks of the United States. It is responsible for the Second District of the Federal Reserve System, which encompasses the State of New York, the 12 northern counties of New ...
and a panel member of the U.S. Monetary Policy Forum since 2007. He is a research fellow of the
Centre for Economic Policy Research
The Centre for Economic Policy Research (CEPR) is an independent, non‐partisan, pan‐European non‐profit organisation. Its mission is to enhance the quality of policy decisions through providing policy‐relevant research, based soundly in e ...
since 1998. Shin was the chairman of the editorial board of the ''
Review of Economic Studies
''The Review of Economic Studies'' (also known as ''REStud'') is a quarterly peer-reviewed academic journal covering economics. It was established in 1933 by a group of economists based in Britain and the United States. The original editorial team ...
'' from 1999 to 2003. He collaborated with
Isabel Schnabel
Isabel Schnabel (née Gödde, born 9 August 1971) is a German economist who has been serving as a member of the Executive Board of the European Central Bank since 2020.
She became professor of financial economics at the University of Bonn in 20 ...
, comparing the
Bankruptcy of Lehman Brothers
The bankruptcy of Lehman Brothers on September 15, 2008, was the climax of the subprime mortgage crisis. After the financial services firm was notified of a pending credit downgrade due to its heavy position in subprime mortgages, the Federal Re ...
with the bankruptcy of
Leendert Pieter de Neufville
Leendert Pieter de Neufville (Amsterdam, March 8, 1729Rotterdam, July 28, 1811) was a Dutch merchant and banker trading in silk, linen, and grain. His business grew quickly during the Seven Years' War. De Neufville secretly supplied the Prussian ...
in 1763.
Shin was elected a Fellow of the
Econometric Society
The Econometric Society is an international society of academic economists interested in applying statistical tools to their field. It is an independent organization with no connections to societies of professional mathematicians or statisticians. ...
and of the
European Economic Association
The European Economic Association (EEA) is a professional academic body which links European economists. It was founded in the mid-1980s. Its first annual congress was in 1986 in Vienna and its first president was Jacques Drèze. The current pres ...
in 2004, and a Fellow of the
British Academy
The British Academy is the United Kingdom's national academy for the humanities and the social sciences.
It was established in 1902 and received its royal charter in the same year. It is now a fellowship of more than 1,000 leading scholars span ...
in 2005. He was awarded the
R. K. Cho Economics Prize
The R. K. Cho Economics Prize is awarded by Yonsei University in Seoul, South Korea to academics in the field of economics who have contributed to the development of scholarship and education. As of 2018, the prize includes a plaque, a medal, and ...
in 2009.
In December 2009, Shin was named chief advisor to President Lee Myung-bak on international finance. He played a major role in formulating South Korea's
macroprudential policy
Macroprudential regulation is the approach to financial regulation that aims to mitigate risk to the financial system as a whole (or "systemic risk"). In the aftermath of the late-2000s financial crisis, there is a growing consensus among policyma ...
and helped develop the agenda for the
G-20
The G20 or Group of Twenty is an intergovernmental forum comprising 19 countries and the European Union (EU). It works to address major issues related to the global economy, such as international financial stability, climate change mitigation, ...
during Korea's presidency, which culminated in the
2010 G-20 Seoul summit
The 2010 G20 Seoul Summit was the fifth meeting of the G20 heads of government/heads of state, to discuss the global financial system and the world economy,Cho Jin-seo "Seoul unveils G20 summit's symbol," ''Korea Times'' (ROK). July 8, 2010; ...
on November 11–12, 2010.
In September 2013 the
Basel
, french: link=no, Bâlois(e), it, Basilese
, neighboring_municipalities= Allschwil (BL), Hégenheim (FR-68), Binningen (BL), Birsfelden (BL), Bottmingen (BL), Huningue (FR-68), Münchenstein (BL), Muttenz (BL), Reinach (BL), Riehen (BS ...
,
Switzerland
). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...
–based
Bank for International Settlements
The Bank for International Settlements (BIS) is an international financial institution owned by central banks that "fosters international monetary and financial cooperation and serves as a bank for central banks".
The BIS carries out its work thr ...
(BIS) announced that Shin would begin a five-year term as its Economic Adviser and Head of Research starting in May 2014. In that role he would also serve as a member of the BIS Executive Committee.
Research contribution
Global coordination games belong to a subfield of
game theory
Game theory is the study of mathematical models of strategic interactions among rational agents. Myerson, Roger B. (1991). ''Game Theory: Analysis of Conflict,'' Harvard University Press, p.&nbs1 Chapter-preview links, ppvii–xi It has appli ...
that gained momentum in 1998 when he published an article with
Stephen Morris. Shin and Morris considered a stylized
currency crises model
A model is an informative representation of an object, person or system. The term originally denoted the Plan_(drawing), plans of a building in late 16th-century English, and derived via French and Italian ultimately from Latin ''modulus'', a mea ...
, in which traders observe the relevant fundamentals with small noise, and show that this leads to the selection of a unique equilibrium. This result is in stark contrast with models of
complete information
In economics and game theory, complete information is an economic situation or game in which knowledge about other market participants or players is available to all participants. The utility functions (including risk aversion), payoffs, strategies ...
, which feature multiple equilibria.
In 2011 he won the second ''
Financial Times
The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...
'' annual essay contest on
banking regulation
Bank regulation is a form of government regulation which subjects banks to certain requirements, restrictions and guidelines, designed to create market transparency between banking institutions and the individuals and corporations with whom they ...
sponsored by the
International Centre for Financial Regulation
The International Centre for Financial Regulation (ICFR) (2009–12) was a UK-based non-partisan organisation focused entirely on financial regulation that operated between 2009 and 2012.
History
IFCR was the product of a collaboration between a ...
. He wrote about how the
G-20 major economies
The G20 or Group of Twenty is an Intergovernmental organization, intergovernmental forum comprising 19 countries and the European Union (EU). It works to address major issues related to the World economy, global economy, such as international f ...
could increase financial stability with
macroprudential regulation
Macroprudential regulation is the approach to financial regulation that aims to mitigate risk to the financial system as a whole (or "systemic risk"). In the aftermath of the late-2000s financial crisis, there is a growing consensus among policymak ...
s that "leans against the
credit cycle The credit cycle is the expansion and contraction of access to credit over time. Some economists, including Barry Eichengreen, Hyman Minsky, and other Post-Keynesian economists
Post-Keynesian economics is a school of economic thought with its o ...
" using examples from the UK, South Korea, and the United States. Specifically, he "advocated a global tax on non-core banking liabilities as the best way to deflate
bubbles".
Shin argues that "financial firms systematically take more risk as
asset prices rise", which means that the financial system's vulnerability "cannot be measured by price indicators like
credit spreads or
volatility. Instead, analysts should focus on quantities like the amount of assets on intermediary balance sheets and the liquidity and
maturity mismatches between those assets and the liabilities used to fund them".
''Risk and Liquidity''
He is known for this 2010 book ''Risk and Liquidity'' which opens with a quote from an anonymous risk manager who says: "The value added of good
risk management is that you can take more risks". He then says that financial risk is endogenous, due to the thinking expressed in this quote and makes an analogy with
London
London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...
's
Millennium Bridge Several bridges are known as the Millennium Bridge:
* in the United Kingdom
**Gateshead Millennium Bridge
** Lune Millennium Bridge, Lancaster
** Millennium Bridge, Glasgow
** Millennium Bridge, London
** Millennium Bridge (Salford Quays)
** Teesqua ...
in which the instability was also endogenous. When the bridge lurched to the side, everyone adjusted their footing at exactly the same time, to avoid falling over, and this caused a synchronized oscillation.
The Taper Tantrum
Martin Wolf
Martin Harry Wolf (born 16 August 1946 in London) is a British journalist of Austrian-Dutch descent who focuses on economics. He is the associate editor and chief economics commentator at the ''Financial Times''.
Early life
Wolf was born in ...
credits him with coming up with the explanation for the huge global overreaction (called the "taper tantrum") to United States Federal Reserve chair
Ben Bernanke
Ben Shalom Bernanke ( ; born December 13, 1953) is an American economist who served as the 14th chairman of the Federal Reserve from 2006 to 2014. After leaving the Fed, he was appointed a distinguished fellow at the Brookings Institution. Durin ...
's hint that he might taper
quantitative easing
Quantitative easing (QE) is a monetary policy action whereby a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity. Quantitative easing is a novel form of monetary pol ...
in May 2013. Shin presented this theory at a conference on Asia at the
Federal Reserve Bank of San Francisco
The Federal Reserve Bank of San Francisco (informally referred to as the San Francisco Fed) is the federal bank for the twelfth district in the United States. The twelfth district is made up of nine western states—Alaska, Arizona, California, ...
in December 2013. Shin suggested that it was caused by the growth of demand for the private-sector bonds of
emerging economies
An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or were ...
, and the resulting excess global liquidity.
Martin Wolf
Martin Harry Wolf (born 16 August 1946 in London) is a British journalist of Austrian-Dutch descent who focuses on economics. He is the associate editor and chief economics commentator at the ''Financial Times''.
Early life
Wolf was born in ...
"The emerging risks of ticking time bonds"
''Financial Times'', December 10, 2013
Sources
* Stephen Morris and Hyun Song Shin (1998), "Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks", ''
American Economic Review
The ''American Economic Review'' is a monthly peer-reviewed academic journal published by the American Economic Association. First published in 1911, it is considered one of the most prestigious and highly distinguished journals in the field of ec ...
'', 88 (3): 587–97.
Citations
{{DEFAULTSORT:Shin, Hyun-Song
South Korean economists
New classical economists
Academics of the London School of Economics
Princeton University faculty
Fellows of the Econometric Society
1959 births
Living people
Alumni of Magdalen College, Oxford
Alumni of Nuffield College, Oxford
Fellows of Magdalen College, Oxford
Academics of the University of Southampton
Fellows of Nuffield College, Oxford
Fellows of the British Academy