Time recognizes MIT's Sloan School of Management professor, Andrew W. Lo as one of the World's 100 most influential people of 2012.

Translational research - the point at which general scientific knowledge starts to be applied to addressing a specific disease or condition - is the first step on the path to developing a new drug. But traditional investors in translational research (large- and medium-cap biopharmaceutical companies and life science-focused venture capital funds) are becoming increasingly risk averse in the face of escalating challenges in the drug development process. FasterCures recently hosted a Financial Innovations Lab to examine business models and financial instruments that can improve the risk/return ratio for early-stage investors. In this session you'll hear from experts who have designed and implemented new models like leveraged funds, research-based obligations and collaborative funding. If we can find a way to close the funding gap for translational research, we can get one step closer to urgently needed treatments.

The MIT/Sloan School of Management professor and Director of MIT’s Laboratory for Financial Engineering has been widely quoted on the implications of the 2008 financial crisis. One theme that Dr. Lo emphasizes repeatedly is that the risks associated with different asset classes can vary dramatically over time and for this reason, risk must be tracked, forecasted and budgeted.

MIT economist Andrew Lo set out to review a couple books about the financial crisis. Those books led to a couple more books, which led — you see where this is going — to 17 more books. Now, Lo is about to publish "Reading About The Financial Crisis: A 21 Book Review."

Andrew Lo, a professor at MIT's Sloan School of Management, was asked by the Journal of Economic Literature to write a review of three or four of the more important academic books on the crisis. The initial sample, he thought, was too small. There were lots of useful books on the topic, from journalists as well as academics. Widening the spectrum would also highlight areas of disagreement between authors.

Andrew Lo, the Harris & Harris Group Professor at the Massachusetts Institute of Technology, gives the keynote speech at the Conference on Systemic Risk and Data Issues.

As the Greek government appears increasingly likely to default on its debt, economists are envisioning potential dire spillovers to the United States, with anxiety afflicting the financial system, making money tight and possibly tipping the American economy back into recession. MIT Sloan Professor Andrew Lo says, "We may see a number of banks go under."

With shock waves roiling financial markets worldwide, investors are seeking new ways to protect their portfolios from the next upheaval. MIT Sloan Professor, Andrew Lo, says that key strategies to eke out a profit include minimizing costs and getting as much diversification as you're comfortable with."

Day after day, stocks swing sharply by hundreds of points. Some experts see volatility as a problem. Another viewpoint is that stocks are rightly volatile now because there is so much uncertainty about where the economy is heading. MIT Sloan Professor Andrew Lo says that the last few years have been the most volatile for all of recorded history—10 of the biggest 20 daily upswings and 11 of the largest 20 daily drops since the beginning of 1980 to the end of August have occurred in just the last three years.

MIT's Computer Science and Artificial Intelligence Laboratory (CSAIL) welcomed its first full-time member from the MIT Sloan School of Management: Andrew Lo. While the fields of computer science and artificial intelligence may seem atypical for the work of an economist, Lo feels that joining CSAIL is a natural extension of the research path he has forged for many years.

Stock markets have calmed down over the past few days, but economists and analysts warn that investors face years of severe market swings until national debt crises and other threats to the global financial system are finally resolved. MIT Sloan Professor, Andrew Lo, notes that "What's unique is the volatility of the volatility."

More than ever on record, individual stocks in the Standard & Poor's 500 Index are moving in unison, according to data from the stock market research and money management firm Birinyi Associates. Andrew Lo says "When you have overriding political considerations hanging over the market, all stocks are going to respond in kind."

Experts say investors should expect even more volatility in stocks, as herd trading by hedge funds, knee-jerk trader reaction to news and lightning fast computer programs combine to make for a new and uncomfortable normal on Wall Street. MIT Sloan Professor, Andrew Lo, says "We are seeing extraordinary emotional reactions from central banks, politicians, regulators and investors. That kind of reaction is not conducive for building long-term wealth."

Andrew Lo's recent research—which weaves together the work of psychologists, neuroscientists, biologists, and economists—is highlighted in this article.