Home » Uncategorized » Laying a Solid Foundation for My Theory of Asset-Pricing

Laying a Solid Foundation for My Theory of Asset-Pricing

Reblogging in a spirit of reviewing later. It seems that is very much worth the later read and reread.

Fixing the Economists

foundation

In the comments my previous post concerning my theory of asset prices – comments that have, I should add, been extremely productive so far – Nick Edmonds raised some questions as to whether I was dealing with stocks and flows. After a bit of back and forth I realised that what we were dealing with touched on some of the fundamental problems that I noticed with my theory just prior to publication. Therefore, in this post I am going to lay out in very clear terms exactly what we are dealing with and then briefly consider what implications this slightly altered approach has for one of my key conclusions – namely, what I have termed ‘the paradox of speculative profits’.

First and foremost there was some confusion about what I meant by ‘financial saving’ in the paper. I’ve decided that the best way to approach this is to work with…

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