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Asset Pricing Dynamics

  • Gianfranco Tusset
Chapter

Abstract

During the 1920s, Francesco P. Cantelli wrote that the price of a good or asset is the product of an indefinite number of independent causes that oblige us to shift our attention from the causes themselves to the possible laws driving the changes in price. The prediction of changes in prices also lay at the heart of Bachelier’s Theory of Speculation (1900). Despite Cantelli’s acute observation, Italian economists of his time seemed rather skeptical about whether it was possible to forecast prices. They dealt with prices, of both financial assets and real goods, but linked them to the market’s behavior rather than searching for a law to explain their trends. Their work on financial assets consequently failed to follow the path indicated by Cantelli, and already investigated by Bachelier—despite the fact that Bachelier’s Theory was known in Italy. Although the approaches presented in this chapter differ analytically, they reflect a common tendency of authors during the period considered to look at market dynamics in order to understand price trends, and hopefully support their stability.

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Gianfranco Tusset
    • 1
  1. 1.University of PadovaPadovaItaly

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