Financial markets : efficiency, stability
Ghosal, Sayantan (2009) Financial markets : efficiency, stability. In: New Micro-foundations for Macroeconomics, University of Warwick, 10-11 Jul 2009 (Unpublished)Full text not available from this repository.
Official URL: http://www.worldeconomyandfinance.org/warwick2009/...
The paper will construct a model where there is a trade-off between efficiency and stability when individuals trade in financial markets. Achieving efficiency requires the use of trading strategies that are sensitive to precise forecasts about future prices. However, the use of such strategies, combined with deviations from perfect foresight, ensures that convergence to a perfect foresight equilibrium is harder to achieve.
|Item Type:||Conference Item (Paper)|
|Subjects:||H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
|Divisions:||Faculty of Social Sciences > Economics|
|Date:||11 July 2009|
|Status:||Not Peer Reviewed|
|Conference Paper Type:||Paper|
|Title of Event:||New Micro-foundations for Macroeconomics|
|Type of Event:||Conference|
|Location of Event:||University of Warwick|
|Date(s) of Event:||10-11 Jul 2009|
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