Liquidity Preference as Behavior towards Risk
Reads0
Chats0
TLDR
In this article, the authors derived the liquidity preference schedule from some assumptions regarding the behavior of the decision-making units of the economy, and those assumptions are the concern of this paper.Abstract:
One of basic functional relationships in the Keynesian model of the economy is the liquidity preference schedule, an inverse relationship between the demand for cash balances and the rate of interest. This aggregative function must be derived from some assumptions regarding the behavior of the decision-making units of the economy, and those assumptions are the concern of this paper.read more
Citations
More filters
Journal ArticleDOI
Efficient capital markets: a review of theory and empirical work*
TL;DR: Efficient Capital Markets: A Review of Theory and Empirical Work Author(s): Eugene Fama Source: The Journal of Finance, Vol. 25, No. 2, Papers and Proceedings of the Twenty-Eighth Annual Meeting of the American Finance Association New York, N.Y. December, 28-30, 1969 (May, 1970), pp. 383-417 as mentioned in this paper
Journal ArticleDOI
Capital asset prices: a theory of market equilibrium under conditions of risk*
TL;DR: In this paper, the authors present a body of positive microeconomic theory dealing with conditions of risk, which can be used to predict the behavior of capital marcets under certain conditions.
Journal ArticleDOI
Risk, Return, and Equilibrium: Empirical Tests
Eugene F. Fama,James D. MacBeth +1 more
TL;DR: In this article, the relationship between average return and risk for New York Stock Exchange common stocks was tested using a two-parameter portfolio model and models of market equilibrium derived from the two parameter portfolio model.
Book ChapterDOI
The valuation of risk assets and the selection of risky investments in stock portfolios and capital budgets
TL;DR: In this article, the problem of selecting optimal security portfolios by risk-averse investors who have the alternative of investing in risk-free securities with a positive return or borrowing at the same rate of interest and who can sell short if they wish is discussed.
Journal ArticleDOI
Equilibrium in a capital asset market
TL;DR: In this paper, the authors investigated the properties of a market for risky assets on the basis of a simple model of general equilibrium of exchange, where individual investors seek to maximize preference functions over expected yield and variance of yield on their port- folios.
References
More filters
Journal ArticleDOI
The Utility Analysis of Choices Involving Risk
TL;DR: In this paper, the authors suggest that an important class of reactions of individuals to risk can be rationalized by a rather simple extension of orthodox utility analysis, i.e., individuals frequently must, or can, choose among alternatives that differ, among other things, in the degree of risk to which the individual will be subject.
Book ChapterDOI
Speculation and Economic Stability
TL;DR: In this article, the authors examine the effects of speculation on economic stability and show that speculative purchases and sales do not necessarily fall into this category, since the main motivation behind such actions is the expectation of a change in the relevant prices relatively to the ruling price and not a gain accruing through their use, or any transformation effected in them or their transfer between different markets.
Journal ArticleDOI
An axiomatic approach to measurable utility
I. N. Herstein,John Milnor +1 more
TL;DR: In this article, the topology of the prospect space itself is removed, the previous axioms are weakened, an infinite number of sure prospects are allowed, and the existence of a measurable utility is established.
Book ChapterDOI
Rational Behavior, Uncertain Prospects, and Measurable Utility (1950)
TL;DR: In this paper, it is shown that if the economists' theory of assets is completed by a fourth postulate on rational choice, then utility can be defined as a quantity whose mathematical expectation is maximized by the rational man.