Carola Frydman
Carola Frydman

Visiting Associate Professor of Finance

Print Overview

Carola Frydman is a Visiting Associate Professor of Finance at the Kellogg School of Management. Professor Frydman's research focuses on American financial history. Recent research projects examine the evolution of financial markets prior to the Great Depression, with special emphasis on the role of financial intermediaries for firm growth, and on financial crises. In earlier work, she studied the long-run trends in executive compensation, the market for managers, and corporate governance. Her work has been featured in The Wall Street Journal, the New York Times, and The Economist.

Professor Frydman is on leave from Boston University. From 2006 to 2011, she was an Assistant Professor of Finance at the MIT Sloan School of Management where she taught corporate finance in both the MBA and executive education programs. Professor Frydman holds a Ph.D. in Economics from Harvard University, and B.A. and M.A. degrees in Economics from Universidad de San Andres, Argentina. She is a Faculty Research Fellow at the National Bureau of Economic Research.

Areas of Expertise
Banking and Financial Institutions
Corporate Finance
Corporate Governance
Economics of Organizations
Management Compensation

Print Vita
Ph.D., 2006, Economics, Harvard University
M.A., 2004, Economics, Harvard University
M.A., 2000, Economics, Universidad de San Andres
B.A., 1999, Economics, Universidad de San Andrés , Universidad de San Andres, Summa Cum Laude

Academic Positions
Assistant Professor, Economics, Boston University, 2011-present
Faculty Research Fellow, National Bureau of Economic Research, National Bureau of Economic Research (NBER), 2007-present
Visiting Associate Professor of Finance, Kellogg School of Management, Northwestern University, 2013-2014
Assistant Professor of Finance, Sloan School of Management, Massachusetts Institute of Technology, 2006-2013
Visiting Scholar, National Bureau of Economic Research, University of Cambridge, 2009-2010

Other Professional Experience
Local Arrangements Committee, Economic History Associations Meeting, 2010-2011
Program Committee Member, American Finance Association Meetings, 2010-2010
Program Committee Member, Western Finance Association Meetings, 2009-2010
Early Career Women in Finance Conference, Women in Finance Conference, 2009-2009
Program Committee Member, Western Finance Association Meetings, 2007-2007

Print Research
Frydman, Carola, Lily Y. Zhuo and Eric Hilt. Forthcoming. Economic Effects of Runs on Early 'Shadow Banks': Trust Companies and the Impact of the Panic of 1907. Journal of Political Economy.
Benmelech, Efraim and Carola Frydman. 2015. Military CEOs. Journal of Financial Economics. 117(1): 43-59.
Frydman, Carola and Raven Molloy. 2012. Pay Cuts for the Boss: Executive Compensation in the 1940s. Journal of Economic History. 72(1): 225-251.
Frydman, Carola and Raven Molloy. 2011. The Effect of Tax Policy on Executive Compensation: Evidence from Postwar Reforms. Jounal of Public Economics. 23: 2099-2138.
Frydman, Carola and Raven E. Saks. 2010. Executive Compensation: A New View from a Long-Term Perspective, 1936-2005. Review of Financial Studies. 23: 2099-2138.
Frydman, Carola and Raven E. Saks. 2010. Executive Compensation: A New View from a Long-Term Perspective, 1936-2005. Review of Financial Studies. 23: 2099-2138.
Frydman, Carola. 2009. Learning From the Past: Trends in Executive Compensation over the Twentieth Century. CESifo Economic Studies. 55: 458-481.
Frydman, Carola. 2007. The Evolution of the Market for Corporate Executives across the Twentieth Century. Journal of Economic History.: 488-492.
Working Papers
Frydman, Carola and Hilt Eric. 2010. Predators or Watchdogs? Bankers on Corporate Boards in the Era of Finance Capitalism.
Frydman, Carola and Raven Molloy. 2010. The Compression in Top Income Inequality in the 1940s.
Frydman, Carola. 2007. Rising Through the Ranks. The Evolution of the Market for Corporate Executives, 1936-2003.
Boustan, Leah P., Carola Frydman and Robert Margo. 2014. Human Capital in History. University of Chicago Press.

Print Teaching
Full-Time / Part-Time MBA
Finance II (FINC-431-0)

**This version of Finance II is designed for students who took Finance I in or before Summer 2014. This course will be offered in Fall 2014 in Evanston & Chicago and offered in Winter 2015 in Chicago.**

Finance II: Corporate Finance covers the financial knowledge you need to run a firm, whether the firm is a multi-billion international conglomerate or a three-person start up. You will learn how to answer the three fundamental question of corporate finance: (1) Capital structure or the funding decision: which source(s) of capital should you use to fund the firm's project? (2) Capital budgeting or the investment decision: which projects should you invest in? (3) Dividend decision: how should you deploy the capital that the project returns?

We will cover the three fundamental methods for valuing projects and firms: discounted cash flow (or net present value), real options, and multiples analysis. The class begins with a theoretical framework. The world of finance is very complex. Without a logical structure that you can use to frame and answer questions, you will rapidly become lost and will be unable to defend your position. The theoretical framework is valuable, however, only if you can use it to examine real world decisions. Thus the majority of class time will be devoted to applying the logical framework.

This course is important for anyone who plans to run a firm or a division, who hopes to be involved in the investment or funding decisions of the firm, who plans to work for a service provider who will assist the firm in analyzing these decisions (e.g., banking and consulting), or who plans to invest in firms or advise clients who will invest in firms. Even if you initially specialize in a different functional area, you want to understand how the finance function works. The most brilliant idea isn't useful if you cannot get it funded.

Recommended Prerequisites: ACCT-430 and MECN-430

Accelerated Corporate Finance (FINC-440-0)
Corporate finance covers the financial knowledge you need to run a firm, whether the firm is a multi-billion dollar international conglomerate or a three-person start up. Accelerated Corporate Finance will combine the material from Finance 1 and Finance 2 in an intensive one-quarter course. We will cover valuation (discounted cash flow, multiples, and real options), capital structure (how firms finance themselves and how they manage risk), and payout policy (should firms return capital to investors and if so how). For more details, you should read the descriptions of Finance 1 and Finance 2. The logical concepts will be covered in class, technical skills and intuition will be developed in class and through online exercises, and then the logic and tools will be applied to a set of valuation, financing, risk management, and payout cases. Given the pace of the course, students are expected to be prepared to put in the extra effort in class and outside of class. Basic finance knowledge (discounting) and accounting is assumed

Pre-requisite: Business Analytics I (DECS-430). Business Analytics II (DECS-431) and Accounting for Decision Making (ACCT-430) are recommended and may be taken concurrently.