Krishnamurthy talks about two things from his paper co-authored with Zhiguo He: academic/research progress inspired by the financial crisis and measurement. In 2005 and 2006, he says, people thought about asset pricing largely through the prism of the Campbell–Cochrane consumption habits model and the long-run risk model of Bansal and Yaron. There’s virtue in these models, Krishnamurthy says, but they’re “like looking at the world through a telescope from Mars.” He goes on to provide a sampling of the new models that have emerged since the crisis and discusses different ways to measure risk.

A session from the 2008 Financial Crisis: A Ten-Year Review conference held on 8-9 November 2018 in New York.