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Efficiency and Random Walk

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This chapter, which corresponds to the second subdivision of the part, attempts to characterize stock markets. The stock markets are known as efficient and are representative of the perfect competition. They are also known as advanced indicators of the global economic activity. The evolution of stock market indexes show however trajectories whose amplitudes are often considerably higher than those of gross domestic product. The concept and the models of rational expectations (arbitrage and stock price fixing) will give a first argument to try to explain these differences between trajectories. One will consider the efficiency concept, in the sense of Fama, about the stock markets and their instability.

Keywords

Stock Market Forecast Error Rational Expectation Supply Function Perfect Foresight 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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© Springer-Verlag Berlin Heidelberg 2009

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