Beyond mechanical markets : asset price swings, risk, and the role of the state /
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| Author / Creator: | Frydman, Roman, 1948- |
|---|---|
| Imprint: | Princeton : Princeton University Press, c2011. |
| Description: | xv, 285 p. : ill. ; 24 cm. |
| Language: | English |
| Subject: | |
| Format: | Print Book |
| URL for this record: | http://pi.lib.uchicago.edu/1001/cat/bib/8354037 |
Table of Contents:
- Acknowledgments
- What Went Wrong and What We Can Do about It
- It The Fatal Flaw
- Assuming Away What Matters Most
- The Imperfect Knowledge Alternative
- Fishermen and Financial Markets
- The Survival of the Rational Market Myth
- Opening Economics and Finance to Nonroutine Change and Imperfect Knowledge
- Imperfect Knowledge Economics and Its Implications
- A New Understanding of Asset-Price Swings, Risk, and the Role of the State
- Part I. The Critique
- 1. The Invention of Mechanical Markets
- Economists' Rationality or Markets?
- Was Milton Friedman Really Unconcerned about Assumptions?
- The Post-Crisis Life of Interacting Robots
- Missing the Point in the Economists' Debate
- The Distorted Language of Economic Discourse
- 2. The Folly of Fully Predetermined History
- The Fatal Conceit Revisited
- The Pretense of Exact Knowledge
- The Economist as Engineer
- Staying the Course in the Face of Reason
- 3. The Orwellian World of ôRational Expectationsö
- Muth's Warning Ignored
- The Rational Expectations Revolution: Model Consistency as a Standard of Rationality
- The Spurious Narrative of Rational Expectations
- A World of Stasis and Thought Uniformity
- Economists' Rationality and Socialist Planning
- 4. The Figment of the ôRational Marketö
- Pseudo-Diversity in the ôRational Marketö
- The Irrelevance of the ôRational Marketö
- Beware of Rational Expectations Models
- The Fatal Conceit of the Rational Expectations Hypothesis
- 5. Castles in the Air: The Efficient Market Hypothesis
- The Market Metaphor
- Imagining Markets in a Fully Predetermined World
- Samuelson's Doubts
- The Illusory Stability of the ôRational Marketö
- Efficient Market Hypothesis and Asset-Price Swings
- 6. The Fable of Price Swings as Bubbles
- Reinventing Irrationality
- Bubbles in a World of Rational Expectations: Mechanizing Crowd Psychology
- A Seductive Narrative of Behavioral Bubbles
- Limits to Arbitrage: An Artifact of Mechanistic Theory
- The Trouble with Behavioral Bubbles
- Forgotten Fundamentals
- Part II. An Alternative
- 7. Keynes and Fundamentals
- Was Keynes a Behavioral Economist?
- Imperfect Knowledge and Fundamentals
- Are Fundamentals Really Irrelevant in the Beauty Contest?
- Fundamentals and Equity-Price Movements: Evidence from Bloomberg's Market Stories
- 8. Speculation and the Allocative Performance of Financial Markets
- Short-Term and Value Speculators
- How Short-Term Speculation Facilitates Value Speculation
- Speculation and Economic Dynamism
- 9. Fundamentals and Psychology in Price Swings
- Bulls, Bears, and Individual Forecasting
- Persistent Trends in Fundamentals
- Guardedly Moderate Revisions
- Price Swings in Individual Stocks and the Market
- Price Swings, Genuine Diversity, and Rationality
- Sustained Reversals
- 10. Bounded Instability: Linking Risk and Asset-Price Swings
- The Indispensable Role of Asset-Price Swings in Allocating Capital
- Historical Benchmarks as Gauges of Longer-Term Prospects
- The Unfolding of Excessive Price Swings
- Linking Risk to Distance from Benchmark Levels
- How Markets Ultimately Self-Correct
- The Return of Fundamentals
- 11. Contingency and Markets
- Contingent Market Hypothesis
- Contingency and Instability of Economic Structures
- The Fleeting Profitability of Mechanical Trading Rules
- Temporary Profit Opportunities
- An Intermediate View of Markets and a New Framework for Prudential Policy
- 12. Restoring the Market-State Balance
- The Importance of Policy Reform for Financial Markets
- Rationale for Active State Intervention in Financial Markets
- Excess-Dampening Measures and Guidance Ranges
- Active Excess-Dampening Measures
- Excessive Price Swings and the Banking System
- Imperfect Knowledge and Credit Ratings
- Epilogue
- What Can Economists Know?
- The Search for Omniscience
- Sharp versus Contingent Predictions
- Recognizing Our Own Imperfect Knowledge
- Imperfect Knowledge Economics as the Boundary of Macroeconomic Theory
- References
- Index
