Download or read book Bursting the Bubble Rationality in a Seemingly Irrational Market written by David F. DeRosa and published by CFA Institute Research Foundation. This book was released on 2021-04-02 with total page 206 pages. Available in PDF, EPUB and Kindle. Book excerpt: The presence of speculative bubbles in capital markets (an important area of interest in financial history) is widely accepted across many circles. Talk of them is pervasive in the media and especially in the popular financial press. Bubbles are thought to be found primarily in the stock market, which is our main interest, although bubbles are said to occur in other markets. Bubbles go hand in hand with the notion that markets can be irrational. The academic community has a great interest in bubbles, and it has produced scholarly literature that is voluminous. For some economists, doing bubble research is like joining the vanguard of a Kuhnian paradigm shift in economic thinking. Not so fast. If bubbles did exist, they would pose a serious challenge to neoclassical finance. Bubbles would contradict the ideas that markets are rational or work in an informationally efficient manner. That’s what makes the topic of bubbles interesting. This book reviews and evaluates the academic literature as well as some popular investment books on the possible existence of speculative bubbles in the stock market. The main question is whether there is convincing empirical evidence that bubbles exist. A second question is whether the theoretical concepts that have been advanced for bubbles make them plausible. The reader will discover that I am skeptical that bubbles actually exist. But I do not think I or anyone else will ever be able to conclusively prove that there has never been a bubble. From studying the literature and from reading history, I find that many famous purported bubbles reflect inaccurate history or mistakes in analysis or simply cannot be shown to have existed. In other instances, bubbles might have existed. But in each of those cases, there are credible rational explanations. And good evidence exists for the idea that even if bubbles do exist, they are not of great importance to understanding the stock market.

Download or read book Irrational Exuberance written by Robert J. Shiller and published by Princeton University Press. This book was released on 2016-08-16 with total page 392 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why the irrational exuberance of investors hasn't disappeared since the financial crisis In this revised, updated, and expanded edition of his New York Times bestseller, Nobel Prize–winning economist Robert Shiller, who warned of both the tech and housing bubbles, cautions that signs of irrational exuberance among investors have only increased since the 2008–9 financial crisis. With high stock and bond prices and the rising cost of housing, the post-subprime boom may well turn out to be another illustration of Shiller's influential argument that psychologically driven volatility is an inherent characteristic of all asset markets. In other words, Irrational Exuberance is as relevant as ever. Previous editions covered the stock and housing markets—and famously predicted their crashes. This edition expands its coverage to include the bond market, so that the book now addresses all of the major investment markets. It also includes updated data throughout, as well as Shiller's 2013 Nobel Prize lecture, which places the book in broader context. In addition to diagnosing the causes of asset bubbles, Irrational Exuberance recommends urgent policy changes to lessen their likelihood and severity—and suggests ways that individuals can decrease their risk before the next bubble bursts. No one whose future depends on a retirement account, a house, or other investments can afford not to read this book.

Download or read book NBER Reporter written by National Bureau of Economic Research and published by . This book was released on 1987 with total page 386 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book conomics Letters written by and published by . This book was released on 1987 with total page 426 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The C F A Digest written by Institute of Chartered Financial Analysts and published by . This book was released on 1987 with total page 418 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book NBER Publications written by National Bureau of Economic Research and published by . This book was released on 1921 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book TEN YEARS OF ECONOMICS LETTERS written by JERRY GREEN and published by . This book was released on with total page 132 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book A Question of Balance written by William Nordhaus and published by Yale University Press. This book was released on 2014-10-01 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt: How economic analysis can help us design economic policies to address the looming challenges of global warming As scientific and observational evidence on global warming piles up every day, questions of economic policy in this central environmental topic have taken center stage. But as author and prominent Yale economist William Nordhaus observes, the issues involved in understanding global warming and slowing its harmful effects are complex and cross disciplinary boundaries. For example, ecologists see global warming as a threat to ecosystems, utilities as a debit to their balance sheets, and farmers as a hazard to their livelihoods. In this important work, William Nordhaus integrates the entire spectrum of economic and scientific research to weigh the costs of reducing emissions against the benefits of reducing the long-run damages from global warming. The book offers one of the most extensive analyses of the economic and environmental dynamics of greenhouse-gas emissions and climate change and provides the tools to evaluate alternative approaches to slowing global warming. The author emphasizes the need to establish effective mechanisms, such as carbon taxes, to harness markets and harmonize the efforts of different countries. This book not only will shape discussion of one the world's most pressing problems but will provide the rationales and methods for achieving widespread agreement on our next best move in alleviating global warming.

Download or read book Are User Fees Regressive written by Paul J. Gertler and published by . This book was released on 1987 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we derive a discrete choice model of the demand for medical care from a theoretical model that implies a natural interrelation between price and income. We show that, in the context of a discrete choice model, if health is a normal good, then the price elasticity of the demand for health care must decline as income rises. This implies that the models in previous discrete choice studies which restrict the price effect to be independent of income are misspecified. The model is estimated using data from a 1984 Peruvian survey, and a parsimonious flexible functional form. Unlike previous studies, we find that price plays a significant role in the demand for health care, and that demand becomes more elastic as income falls, implying that user fees would reduce the access to care for the poor proportionally more than for the rich. Our simulations show that user fees can generate substantial revenues, but are accompanied by substantial reductions in aggregate consumer welfare, with the burden of the loss on the poor. These results demonstrate that undiscriminating user fees would be regressive both in terms of access and welfare.

Download or read book Theory of Financial Decision Making written by Jonathan E. Ingersoll and published by Rowman & Littlefield. This book was released on 1987 with total page 506 pages. Available in PDF, EPUB and Kindle. Book excerpt: Based on courses developed by the author over several years, this book provides access to a broad area of research that is not available in separate articles or books of readings. Topics covered include the meaning and measurement of risk, general single-period portfolio problems, mean-variance analysis and the Capital Asset Pricing Model, the Arbitrage Pricing Theory, complete markets, multiperiod portfolio problems and the Intertemporal Capital Asset Pricing Model, the Black-Scholes option pricing model and contingent claims analysis, 'risk-neutral' pricing with Martingales, Modigliani-Miller and the capital structure of the firm, interest rates and the term structure, and others.

Download or read book Private Saving in the United States written by Patric H. Hendershott and published by . This book was released on 1987 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: The official personal and private saving statistics contain a number of conceptual measurement errors. In this paper we develop and analyze personal and private saving measures adjusted for the difference between income tax payments and actual liabilities, saving via net purchases of government pension assets (including social security) and consumer durables, and that part of after-tax interest income attributable to inflation. We find that the adjusted personal and private saving rates in recent years are only slightly below their post-1950 averages, not at all time lows as reported in the official NIPA statistics. Furthermore, over the past 35 years, personal saving has been more volatile and corporate saving less volatile than the official measures. Also, the inflation premium corrections remove the negative correlation between personal and corporate saving. That is, the often observed negative correlation between the official measures of personal and corporate saving is due solely to measurement errors in the two series. Finally, the decrease in federal government saving in the 1980s is the continuation of a 30-year trend, not a one-time aberration.

Download or read book Advanced Asset Pricing Theory written by Chenghu Ma and published by World Scientific. This book was released on 2011 with total page 818 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a broad introduction to modern asset pricing theory. The theory is self-contained and unified in presentation. Both the no-arbitrage and the general equilibrium approaches of asset pricing theory are treated coherently within the general equilibrium framework. It fills a gap in the body of literature on asset pricing for being both advanced and comprehensive. The absence of arbitrage opportunities represents a necessary condition for equilibrium in the financial markets. However, the absence of arbitrage is not a sufficient condition for establishing equilibrium. These interrelationships are overlooked by the proponents of the no-arbitrage approach to asset pricing.This book also tackles recent advancement on inversion problems raised in asset pricing theory, which include the information role of financial options and the information content of term structure of interest rates and interest rates contingent claims.The inclusion of the proofs and derivations to enhance the transparency of the underlying arguments and conditions for the validity of the economic theory made it an ideal advanced textbook or reference book for graduate students specializing in financial economics and quantitative finance. The detailed explanations will capture the interest of the curious reader, and it is complete enough to provide the necessary background material needed to delve deeper into the subject and explore the research literature.Postgraduate students in economics with a good grasp of calculus, linear algebra, and probability and statistics will find themselves ready to tackle topics covered in this book. They will certainly benefit from the mathematical coverage in stochastic processes and stochastic differential equation with applications in finance. Postgraduate students in financial mathematics and financial engineering will also benefit, not only from the mathematical tools introduced in this book, but also from the economic ideas underpinning the economic modeling of financial markets.Both these groups of postgraduate students will learn the economic issues involved in financial modeling. The book can be used as an advanced text for Masters and PhD students in all subjects of financial economics, financial mathematics, mathematical finance, and financial engineering. It is also an ideal reference for practitioners and researchers in the subjects.

Download or read book A Behavioral Approach to Asset Pricing written by Hersh Shefrin and published by Elsevier. This book was released on 2008-05-19 with total page 636 pages. Available in PDF, EPUB and Kindle. Book excerpt: Behavioral finance is the study of how psychology affects financial decision making and financial markets. It is increasingly becoming the common way of understanding investor behavior and stock market activity. Incorporating the latest research and theory, Shefrin offers both a strong theory and efficient empirical tools that address derivatives, fixed income securities, mean-variance efficient portfolios, and the market portfolio. The book provides a series of examples to illustrate the theory. The second edition continues the tradition of the first edition by being the one and only book to focus completely on how behavioral finance principles affect asset pricing, now with its theory deepened and enriched by a plethora of research since the first edition

Download or read book Tests of International CAPM with Time varying Convariances written by Charles Engel and published by . This book was released on 1987 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book General Equilibrium Growth and Trade II written by Robert Becker and published by Academic Press. This book was released on 2014-05-10 with total page 630 pages. Available in PDF, EPUB and Kindle. Book excerpt: General Equilibrium, Growth, and Trade, Volume II: The Legacy of Lionel McKenzie presents the impact of Lionel McKenzie's contributions on modern economics. This book discusses McKenzie's researches that are relevant in applied economic fields, including general equilibrium, optimal growth, and international trade. Organized into three parts encompassing 24 chapters, this volume begins with an overview of the existence of competitive equilibrium in an economy with a finite number of agents and commodities. This text then presents two analyses that are basically responses to criticism of the development of real indeterminacy. Other chapters consider McKenzie's assumption of irreducibility, which plays a significant role in showing how compensated equilibria will be uncompensated equilibria because agents have cheaper net trade vectors in their feasible sets. This book discusses as well some properties of competitive equilibria for dynamic exchange economies with an infinite horizon and incomplete financial markets. This book is a valuable resource for economists and economic theorists.

Download or read book Econophysics and Capital Asset Pricing written by James Ming Chen and published by Springer. This book was released on 2017-10-04 with total page 293 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book rehabilitates beta as a definition of systemic risk by using particle physics to evaluate discrete components of financial risk. Much of the frustration with beta stems from the failure to disaggregate its discrete components; conventional beta is often treated as if it were "atomic" in the original Greek sense: uncut and indivisible. By analogy to the Standard Model of particle physics theory's three generations of matter and the three-way interaction of quarks, Chen divides beta as the fundamental unit of systemic financial risk into three matching pairs of "baryonic" components. The resulting econophysics of beta explains no fewer than three of the most significant anomalies and puzzles in mathematical finance. Moreover, the model's three-way analysis of systemic risk connects the mechanics of mathematical finance with phenomena usually attributed to behavioral influences on capital markets. Adding consideration of volatility and correlation, and of the distinct cash flow and discount rate components of systematic risk, harmonizes mathematical finance with labor markets, human capital, and macroeconomics.

Download or read book Characteristics of Hostile and Friendly Takeover Targets written by Randall Morck and published by . This book was released on 1987 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: Compared to an average Fortune 500 firm, a target of a hostile takeover is smaller, older, has a lower Tobin's Q, invests less of its income, and is growing more slowly. The low Q seems to be an industry-specific rather than a firm-specific effect. In addition, a hostile target is less likely to be run by a member of the founding family, and has lower officer ownership, than the average firm. In contrast, a target of a friendly acquisitions is smaller and younger than an average Fortune 500 firm, and has comparable Tobin's Qs and most other financial characteristics. Friendly targets are more likely to be run by a member of the founding family, and have higher officer ownership, than the average firm. The decision of a CEO with a large stake and/or with a relationship to a founder to retire often precipitates a friendly acquisition. These results suggest that the motive for a takeover often determines its mood. Thus disciplinary takeovers are more often hostile, and synergistic ones are more often friendly.