Markus Brunnermeier

Markus Konrad Brunnermeier (born March 22, 1969) is an economist, who is the Edwards S. Sanford Professor of Economics at Princeton University.

Brunnermeier is a faculty member of Princeton's department of economics and director of the Bendheim Center for Finance.

He is also a nonresident senior fellow at the Peterson Institute for International Economics.

Brunnermeier is also the president of the American Finance Association in 2023.

His research focuses on international financial markets and the macro economy with special emphasis on bubbles, liquidity, financial crises and monetary policy.

He promoted the concepts of Resilience, liquidity spirals, CoVaR as co-risk measure, the paradox of prudence, financial dominance, ESBies, the Reversal Rate, Digital currency areas, the redistributive monetary policy, and the I Theory of Money.

He is or was a member of several advisory groups, including to the IMF, the Federal Reserve Bank of New York, the European Systemic Risk Board, the German Bundesbank and the U.S. Congressional Budget Office.

He is a research associate at CEPR, NBER, and CESifo.

Growing up in Landshut, West Germany, Brunnermeier was expected to follow his father into the business of carpentry.

A slump in the construction industry led Brunnermeier onto a different path.

He worked for the German tax office in Landshut and Munich and served in the German Army before enrolling as an undergraduate student at the University of Regensburg in 1991.

He continued his studies at Vanderbilt University, receiving a master's degree in economics in 1994.

Subsequently, he joined the European Doctoral Program, first, at the Bonn Graduate School of Economics and, from 1995 to 1999, at the London School of Economics.

He was awarded his Ph.D. by the London School of Economics (LSE) in 1999.

His thesis was titled Investor behaviour, financial markets and the international economy.

While at the London School of Economics, Brunnermeier parleyed a survey paper into a book on asset prices, bubbles, herding and crashes.

He was subsequently hired by Princeton University as an assistant professor in 1999.

In 1999, he was selected for the Review of Economic Studies Tour.

The paper won the Smith Breeden Prize in 2004.

He was named a Sloan Fellow in 2005, a Guggenheim Fellow and a Fellow of the Econometric Society in 2010.

He became full professor in 2006 and assumed his current chaired professorship as Edwards S. Sanford Professor of Economics in 2008.

In 2008 he was awarded the Germán Bernácer Prize, which is granted to a European economists under 40.

Brunnermeier and Lasse Pedersen introduced different liquidity concepts and studied liquidity spirals, which are vicious cycles that amplify initial shocks and provide an explanation for the liquidity crisis in 2008.

Brunnermeier with Tobias Adrian from the Federal Reserve Bank of New York created one of the first systemic risk measures, the CoVaR, an alternative to value at risk which takes spillover and contagion effects between assets and industries into account.

In 2011, he set up the Julis-Rabinowitz Center for Public Policy and Finance at the Princeton School of Public and International Affairs.

In 2014, he became director of Princeton's Bendheim Center for Finance.

Brunnermeier earned an honorary doctorate degree in 2022 from the faculty of economics at the University of Regensburg.

Brunnermeier received several career awards.

In 2016, the Bank for International Settlements (BIS) appointed him as the Lamfalussy Senior Research Fellow.

He was elected as President of The American Finance Association in 2023, where he previously served as Vice President in 2022.

Brunnermeier is also affiliated with the National Bureau of Economic Research, the Centre for Economic Policy Research in London, and directs the "Macro, Money and International Finance" area at the CESifo network.

He is or was a member of several advisory groups, including to the IMF, the Federal Reserve Bank of New York, the European Systemic Risk Board, the German Bundesbank and the U.S. Congressional Budget Office.

Brunnermeier was an associate editor of several journals, including The American Economic Review, The Journal of Finance, The Review of Financial Studies, the Journal of the European Economic Association and the Journal of Financial Intermediation.

In March 2020, he established the webinar series "Markus' Academy" as a platform for leading thinkers to share their research with the public.

The series' most popular lectures feature guests such as Economist Paul Krugman, former U.S. Secretary of the Treasury Lawrence Summers, Federal Reserve Chairman Jerome Powell, and former Chief Economist of the International Monetary Fund, Oliver Blanchard.

Brunnermeier's research lies at the intersection of international macro, monetary and financial economics.

He primarily studies distortions caused by financial frictions.

These frictions invalidate the Efficient market hypothesis (EMH), a proposition that markets incorporate all information relevant to prices immediately and consequently the price of a given asset accurately represents the likely value of that asset.

Faced with the empirical evidence that asset prices diverged from their fundamentals during the dot-com bubble, Brunnermeier crafted a model of trading where participants in the market would recognize bubbles in asset prices but continue to trade "into the wind".

Brunnermeier's empirical paper, coauthored with Stefan Nagel, documents that hedge funds were riding the dot-com bubble.