A01=Michael D. Goldberg
A01=Roman Frydman
Account (accountancy)
Alternative investment
Asset
Asset management
Author_Michael D. Goldberg
Author_Roman Frydman
Behavioral economics
Bid price
Bloomberg L.P.
Calculation
Capitalism
Category=JPQB
Category=KC
Category=KCP
Category=KFF
Central bank
Currency
Dividend
Downswing
Economic bubble
Economic planning
Economic policy
Economics
Economist
Economy
Efficient-market hypothesis
eq_bestseller
eq_business-finance-law
eq_isMigrated=1
eq_isMigrated=2
eq_nobargain
eq_non-fiction
eq_society-politics
Equity Market
Exchange rate
Finance
Financial capital
Financial crisis
Financial crisis of 2007-08
Financial market participants
Forecasting
Foreign exchange market
Inflation
Inflation targeting
Information asymmetry
Interest rate
Investment
Investor
Knowledge economy
Leverage (finance)
Macroeconomics
Market (economics)
Market liquidity
Market participant
Market price
Market trend
Monetary policy
Optimism
Participant
Policy
Prediction
Price index
Probability
Productivity
Rational expectations
Rationality
Real estate appraisal
Real estate economics
Recession
Relative price
Risk aversion
Risk premium
S&P 500 Index
Share price
Speculation
Stock market
Systemic risk
Trader (finance)
Trading strategy
Uncertainty
Valuation (finance)
Value (economics)
Volcker Rule
Product details
- ISBN 9780691145778
- Weight: 539g
- Dimensions: 152 x 235mm
- Publication Date: 27 Feb 2011
- Publisher: Princeton University Press
- Publication City/Country: US
- Product Form: Hardback
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In the wake of the global financial crisis that began in 2007, faith in the rationality of markets has lost ground to a new faith in their irrationality. The problem, Roman Frydman and Michael Goldberg argue, is that both the rational and behavioral theories of the market rest on the same fatal assumption - that markets act mechanically and economic change is fully predictable. In "Beyond Mechanical Markets", Frydman and Goldberg show how the failure to abandon this assumption hinders our understanding of how markets work, why price swings help allocate capital to worthy companies, and what role government can and can't play. The financial crisis, Frydman and Goldberg argue, was made more likely, if not inevitable, by contemporary economic theory, yet its core tenets remain unchanged today. In response, the authors show how imperfect knowledge economics, an approach they pioneered, provides a better understanding of markets and the financial crisis. Frydman and Goldberg deliver a withering critique of the widely accepted view that the boom in equity prices that ended in 2007 was a bubble fueled by herd psychology.
They argue, instead, that price swings are driven by individuals' ever-imperfect interpretations of the significance of economic fundamentals for future prices and risk. Because swings are at the heart of a dynamic economy, reforms should aim only to curb their excesses. Showing why we are being dangerously led astray by thinking of markets as predictably rational or irrational, Beyond Mechanical Markets presents a powerful challenge to conventional economic wisdom that we can't afford to ignore.
Roman Frydman is professor of economics at New York University. Michael D. Goldberg is the Roland H. O'Neal Professor at the University of New Hampshire. They are the coauthors of "Imperfect Knowledge Economics" (Princeton).
