Reviving Allais's Lost Theory of Psychological Time To save 30%, add the book to your shopping cart, and enter code BARUNC in the "Coupon Code" field at check out.* The e-book of Uncertainty, Expectations, and Financial Instability is available wherever e-books are sold! Eric Barthalon applies the neglected theory of psychological time and memory decay of Nobel Prize-winning economist Maurice Allais (1911-2010) to model investors' psychology in the present context of recurrent financial crises. Shaped by the behavior of the demand for money during episodes of hyperinflation, Allais's theory proves economic agents perceive the flow of clocks' time and forget the past at a context-dependent pace: rapidly in the presence of persistent and accelerating inflation and slowly in the event of the opposite situation. Barthalon recasts Allais's work as a general theory of "expectations" under uncertainty, closing the gap between economic theory and investors' behavior.
Barthalon extends Allais's theory to the field of financial instability, demonstrating its relevance to nominal interest rates in a variety of empirical scenarios and the positive nonlinear feedback that exists between asset price inflation and the demand for risky assets. He concludes with the policy implications for governments and regulators.
$60.00 $42.00 Use discount code BARUN at check-out
Cloth | 448 pages | £41.50* |
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