We show that the volatility of a price process, which is usuallyregarded as an impediment to financial growth, can serve as an en-dogenous factor in its acceleration.

Modern portfolio theory regards the return of an asset as its upside, while volatilityis seen as its downside. This view is shared by the majority of investors who dislikevolatile markets. Recent results in financial mathematics, however, show thatvolatility is actually good, rather than bad,...