Positive Feedback Investment Strategies and Destabilizing Rational Speculation PDF Download

Author: J. Bradford De Long
Publisher:
ISBN:
Category : Investments
Languages : en
Pages : 28

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Author: J. Bradford DeLong
Publisher:
ISBN:
Category :
Languages : en
Pages : 31

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Analyses of the role of rational speculators in financial markets usually presume that such investors dampen price fluctuations by trading against liquidity or noise traders. This conclusion does not necessarily hold when noise traders follow positive-feedback investment strategies buy when prices rise and sell when prices fall. In such cases, it may pay rational speculators to try to jump on the bandwagon early and to purchase ahead of noise trader demand. If rational speculators' attempts to jump on the bandwagon early trigger positive-feedback investment strategies, then an increase in the number of forward-looking rational speculators can lead to increased volatility of prices about fundamentals.

Author: J. Bradfort de Long
Publisher:
ISBN:
Category :
Languages : es
Pages : 29

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Category :
Languages : en
Pages :

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Author: Laura E. Kodres
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Positive feedback investment is a speculative trading strategy in which individuals buy after price increases and sell after price declines. Theoretical models of this trading strategy have shown that prices can be destabilized. I examine individual accounts in the Samp;P 500 Index futures contract to detect positive feedback trading. A significant minority of active accounts perform positive feedback strategies more frequently than can be explained by chance. After periods of concentrated positive feedback trading, however, prices do not reverse as theory predicts. Test results of the relation between positive feedback volume and volatility are mixed: positive feedback volume and volatility are positively associated using two different techniques, but not a third technique.

Author: Andrei Shleifer
Publisher: Harvard University Press
ISBN: 9780674015821
Category : Business & Economics
Languages : en
Pages : 224

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This book offers a firsthand glimpse into the intellectual challenges that Russia's turbulent transition generated. It deals with many of the most important reforms, from Gorbachev's half-hearted "perestroika," to the mass privatization program, to the efforts to build legal and regulatory institutions of a market economy.

Author: Sushil Bikhchandani
Publisher:
ISBN:
Category : Capital market
Languages : en
Pages : 38

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Author: Eva R. Porras
Publisher: Springer
ISBN: 1137524421
Category : Business & Economics
Languages : en
Pages : 283

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This book focuses on extending the models and theories (from a mathematical/statistical point of view) which were introduced in the first volume to a more technical level. Where volume I provided an introduction to the mathematics of bubbles and contagion, volume II digs far more deeply and widely into the modeling aspects.

Author: Roman Frydman
Publisher: Princeton University Press
ISBN: 1400846455
Category : Business & Economics
Languages : en
Pages : 441

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This book originated from a 2010 conference marking the fortieth anniversary of the publication of the landmark "Phelps volume," Microeconomic Foundations of Employment and Inflation Theory, a book that is often credited with pioneering the currently dominant approach to macroeconomic analysis. However, in their provocative introductory essay, Roman Frydman and Edmund Phelps argue that the vast majority of macroeconomic and finance models developed over the last four decades derailed, rather than built on, the Phelps volume's "microfoundations" approach. Whereas the contributors to the 1970 volume recognized the fundamental importance of according market participants' expectations an autonomous role, contemporary models rely on the rational expectations hypothesis (REH), which rules out such a role by design. The financial crisis that began in 2007, preceded by a spectacular boom and bust in asset prices that REH models implied could never happen, has spurred a quest for fresh approaches to macroeconomic analysis. While the alternatives to REH presented in Rethinking Expectations differ from the approach taken in the original Phelps volume, they are notable for returning to its major theme: understanding aggregate outcomes requires according expectations an autonomous role. In the introductory essay, Frydman and Phelps interpret the various efforts to reconstruct the field--some of which promise to chart its direction for decades to come. The contributors include Philippe Aghion, Sheila Dow, George W. Evans, Roger E. A. Farmer, Roman Frydman, Michael D. Goldberg, Roger Guesnerie, Seppo Honkapohja, Katarina Juselius, Enisse Kharroubi, Blake LeBaron, Edmund S. Phelps, John B. Taylor, Michael Woodford, and Gylfi Zoega.

Author: Kenneth A. Reinert
Publisher: Princeton University Press
ISBN: 1400830400
Category : Political Science
Languages : en
Pages : 1329

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An essential reference to all facets of the world economy Increasing economic globalization has made understanding the world economy more important than ever. From trade agreements to offshore outsourcing to foreign aid, this two-volume encyclopedia explains the key elements of the world economy and provides a first step to further research for students and scholars in public policy, international studies, business, and the broader social sciences, as well as for economic policy professionals. Written by an international team of contributors, this comprehensive reference includes more than 300 up-to-date entries covering a wide range of topics in international trade, finance, production, and economic development. These topics include concepts and principles, models and theory, institutions and agreements, policies and instruments, analysis and tools, and sectors and special issues. Each entry includes cross-references and a list of sources for further reading and research. Complete with an index and a table of contents that groups entries by topic, The Princeton Encyclopedia of the World Economy is an essential resource for anyone who needs to better understand the global economy. More than 300 alphabetically arranged articles on topics in international trade, finance, production, and economic development International team of contributors Annotated list of further reading with each article Topical list of entries Full index and cross-references Entry categories and sample topics: Concepts and principles: globalization, anti-globalization, fair trade, foreign direct investment, international migration, economic development, multinational enterprises Models and theory: Heckscher-Ohlin model, internalization theory, New Trade Theory, North-South trade, Triffin dilemma Institutions and agreements: European Union, International Monetary Fund, World Trade Organization, World Bank, Doha Round, international investment agreements Policies and instruments: dollar standard, international aid, sanctions, tariffs Analysis and tools: exchange rate forecasting, effective protection, monetary policy rules Sectors and special issues: child labor, corporate governance, the digital divide, health and globalization, illegal drugs trade, petroleum, steel