Dwight Jaffee was born in Chicago on 7 February 1943 and studied at Oberlin College (1960-61) before going on to a BA in economics at Northwestern University (1964).
He followed this with a PhD on “Credit Rationing and the Commercial Loan Market” at the Massachusetts Institute of Technology (1968), where he also served as an instructor in the economics department (1967-68).
He then moved to Princeton University, where he rose through the ranks from assistant professor of economics (1968-72) to associate professor (1972-75) and finally full professor (1975-91).
After more than two decades at Princeton, however, Professor Jaffee took up a position at the University of California, Berkeley as professor of finance and real estate, acquiring the additional title of Willis Booth professor of banking, finance and real estate in 1998. He was also a member of the Finance Group at the Haas School of Business and co-chair of its Fisher Center for Real Estate and Urban Economics.
Shortly after joining Berkeley-Haas, Professor Jaffee also led a project with Saint Petersburg State University to create the first post-Soviet business school in Russia.
He rapidly established himself as a leading authority on mortgage markets, banking and risk – a field that soon became all too topical a subject – and he was called to testify before Congress in the hearings about the recent banking and housing crisis.
“Dwight Jaffee was a world-class scholar,” said Nancy Wallace, the other chair of the Fisher Center, and possessed “a razor-sharp intellect, which he applied with skill and grace in his efforts to affect the public policy debate on questions related to the causes of the financial crisis – which he had anticipated years before its onset”.
Later in his life, Professor Jaffee turned his attention to the problems of insuring against catastrophic events such as earthquakes or terrorist attacks. Given that the remote chance of a disaster means that insurers potentially need access to vast sums of capital, many understandably retreated from catastrophe insurance, so he asked what the role of governments was in trying to prop up such markets.
An adviser to many European central banks, Professor Jaffee was also the author of 171 papers and a number of books. Together with Ashok Bardhan and Cynthia Kroll, he wrote The Impact of Globalization in a High-Tech Economy (2003) and edited The Oxford Handbook of Offshoring and Global Employment (2013).
Professor Jaffee died on 28 January and is survived by his wife Lynne Heinrich, a daughter, a son and two grandchildren.
