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This paper studies the effect of new fund flows on investment behavior and the resulting equilibrium price of risk. The Small Fund Industry model shows equilibria with overinvestment in unprofitable and underinvestment in profitable investment opportunities. The Large Fund Industry model derives...
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problem, and neither did Keynes, who had to face the problem in “The General Theory”. A consequential logical conclusion to … movements on financial markets are related to the real sphere of production. -- Monetary production theory ; stock …
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