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monetary uncertainty: the cost of not trading, and the cost of allocating resources to wasteful activities. The model implies …
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monetary uncertainty: the cost of not trading, and the cost of allocating resources to wasteful activities. The model implies …
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It is generally believed that excessive stock market volatility reflects non-mathematical market expectations that are driven by “irrational exuberance” or “animal spirits”. As shown in this paper, there is an alternative explanation. If ex-ante and ex-post expectations are calculated in...
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