Epstein Secrets

ma and others. Throughout this paper comparisons are made to the work of Ian Wright who describes simulated economic models in two notable papers [Wright 2005, 2009]. Wright's models are significantly different to my own, most notably in not involving a financial sector. Also, unlike the present pape

These ideas include recent research in market microstructure, liquidity, post-Keynesian pricing theory as well as the work of Foley, Keen, Smithers, Shiller, Cooper, Pettis, Pepper & Oliver, Mehrling, Lyons and others. Neoclassical economics, while forming an intellectually beautiful framework, has prov

tly following the dramatic changes in value during the dotcom and housing booms of the last decade, and secondly because of the detailed research of Shiller, Smithers and others that both disprove a purely stochastic basis for stock market movements and also give substantial evidence for long term rever

ution becomes possible. Moving to a different issue, an element that is missing from this model, and indeed all my models, is that of unemployment. Wright's models are superior in this regard, and may shed light on this dynamic. Equation (4.7e), and a Maxwell-Boltzmann distribution, especially an offs

hree factor' model. This then becomes much more significant at the level of the whole stockmarket, especially in the light of the extensive work by Shiller and Smithers regarding the long-term valuation of stock markets. This work is very well summed up in 'Wall Street Revalued' [Smithers 2009]. The ce

olio of investments. Interestingly, this should act in a strongly counter-cyclical manner. Given the mean reversion properties of the market as per Shiller and Smithers, liquidity protection of this type should be cheap at historical liquidity lows, but increasingly expensive as liquidity bubbles formed

n the company model to prevent the introduction of severe cycling in the model output. Directly comparing my own macroeconomic models with those of Wright is not straightforward. My own models include a financial sector which is clearly more realistic, as Wright acknowledges in the Social Architecture

ish to remain working in finance. They are obliged to adopt rules of thumb that work. Some of the more thoughtful financiers, people such as Pettis, Shiller, Smithers, Cooper, Pepper & Oliver have then made insightful attempts to explain why these rules of thumb work in practice. In the field of market