MIT Economist Andrew W. Lo on Finance, AI, and Human Behavior

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Episode Summary Andrew W. Lo tackles AI-assisted financial advising, healthcare, and the human condition. Episode Notes In this the first of two pilot episodes of Chalk Radio with VIDEO, Professor Andrew Lo, who teaches finance at MIT’s Sloan School of Management, knows that many people find financial matters perplexing and scary. Lots of us don’t have a good head for numbers, and besides, how can one get advice and make sound decisions when it’s taboo to discuss one’s finances at all? That’s where a financial advisor is useful–someone who understands the concepts, can crunch the numbers, and has a fiduciary responsibility to look out for your best interests. For many people, hiring a financial advisor might be a financial impossibility, but Prof. Lo and his colleagues are working to develop an AI financial advisor that not only gives ordinary people access to sound financial advice, but acts with real fiduciary responsibility. Large language models can’t do this yet, he says, but the technology is developing fast. Other topics he touches on in this episode include the outsized influence of finance on drug development and global decarbonization and the equally outsized influence of teachers on their students–he names many who changed his own life, from his third-grade teacher in Queens to his professors at college and graduate school. Relevant Resources: MIT OpenCourseWare The OCW Educator portal Professor Lo’s faculty page 15.401 Finance Theory I on MIT OpenCourseWare 15.481x Adaptive Markets: Financial Market Dynamics and Human Behavior on MIT Open Learning Library 15.482x Healthcare Finance on MIT Open Learning Library Video version of this interview on YouTube Music in this episode by Blue Dot Sessions Connect with Us If you have a suggestion for a new episode or have used OCW to change your life or those of others, tell us your story. We’d love to hear from you! Call us @ 617-715-2517 On our site On Facebook On X On Instagram On LinkedIn Stay Current Subscribe to the free monthly “MIT OpenCourseWare Update” e-newsletter. Support OCW If you like Chalk Radio and OpenCourseware, donate to help keep these programs going! Credits Sarah Hansen, host and producer Brett Paci, producer Dave Lishansky, producer Jackson Maher, producer Show notes by Peter Chipman Show Contributors Andrew W. Lo Jackson Mahr Brett Paci Sarah Hansen Peter Chipman Dave Lishansky