Posing a major challenge to economic orthodoxy, Imperfect Knowledge Economics asserts that exact models of purposeful human behavior are beyond the reach of economic analysis. Roman Frydman and Michael Goldberg argue that the longstanding empirical failures of conventional economic models stem from their futile efforts to make exact predictions about the consequences of rational, self-interested behavior. Such predictions, based on mechanistic models of human behavior, disregard the importance of individual creativity and unforeseeable sociopolitical change. Scientific though these explanations may appear, they usually fail to predict how markets behave. And, the authors contend, recent behavioral models of the market are no less mechanistic than their conventional counterparts: they aim to generate exact predictions of "irrational" human behavior.
 Frydman and Goldberg offer a long-overdue response to the shortcomings of conventional economic models. Drawing attention to the inherent limits of economists' knowledge, they introduce a new approach to economic analysis: Imperfect Knowledge Economics (IKE). IKE rejects exact quantitative predictions of individual decisions and market outcomes in favor of mathematical models that generate only qualitative predictions of economic change. Using the foreign exchange market as a testing ground for IKE, this book sheds new light on exchange-rate and risk-premium movements, which have confounded conventional models for decades.
 Offering a fresh way to think about markets and representing a potential turning point in economics, Imperfect Knowledge Economics will be essential reading for economists, policymakers, and professional investors.

Imperfect Knowledge Economics: Exchange Rates and Risk

Business & Money

Frydman, Roman

Goldberg, Michael D.

Economics

Princeton University Press

In the wake of the global financial crisis that began in 2007, faith in the rationality of markets has lost ground to a new faith in their irrationality. The problem, Roman Frydman and Michael Goldberg argue, is that both the rational and behavioral theories of the market rest on the same fatal assumption--that markets act mechanically and economic change is fully predictable. In Beyond Mechanical Markets, Frydman and Goldberg show how the failure to abandon this assumption hinders our understanding of how markets work, why price swings help allocate capital to worthy companies, and what role government can and can't play.
 The financial crisis, Frydman and Goldberg argue, was made more likely, if not inevitable, by contemporary economic theory, yet its core tenets remain unchanged today. In response, the authors show how imperfect knowledge economics, an approach they pioneered, provides a better understanding of markets and the financial crisis. Frydman and Goldberg deliver a withering critique of the widely accepted view that the boom in equity prices that ended in 2007 was a bubble fueled by herd psychology. They argue, instead, that price swings are driven by individuals' ever-imperfect interpretations of the significance of economic fundamentals for future prices and risk. Because swings are at the heart of a dynamic economy, reforms should aim only to curb their excesses.
 Showing why we are being dangerously led astray by thinking of markets as predictably rational or irrational, Beyond Mechanical Markets presents a powerful challenge to conventional economic wisdom that we can't afford to ignore.

Beyond Mechanical Markets: Asset Price Swings, Risk, and the Role of the State

In an era defined by economic and industrial competition rather than ideological warfare, the success of the privatization process in Central Europe, Russia, Ukraine, and the Baltics is crucial for the regions' political and economic survival. Recognizing the need for a universally accessible and systematically assembled source of information, the authors have collaborated with carefully selected teams of researchers located in the countries concerned to collect this data for the first time. The analysis of privatization in each country includes an introduction to the economic environment, an account of the legal framework of economic activity, the present forms of ownership, an overview of the privatization programs, and a discussion of the initial transformations of enterprises. This volume provide an authoritative account of the privatization process which is the cornerstone of the current economic transformation. Volume 1 analyzes privatization in Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.

The Privatization Process in Central Europe (CEU Privatization Reports)

Rapaczynski, Andrzej

Earle, John S.

Oxford University Press

Volume 2 of this unique series on privatization covers Russia, Ukraine, Estonia, Latvia, and Lithuania.

The Privatization Process in Russia, Ukraine, and the Baltic States (CEU Privatization Reports)

Provides comprehensive comparative information on the privatization process in five Central European countries. Following an introduction to the economic environment in each country, it covers ownership, state regulation, privatization programmes and the initial transformation of enterprises.

Central European University Press

Provides comprehensive comparative information on the privatization process in five former Soviet republics. Following an introduction to the economic environment in each country, it covers ownership, state regulation, privatization programmes and the initial transformation of enterprises.

The Privatization Process in Russia, the Ukraine, and the Baltic States (CEU Privatization Reports)

The creation of new economic and legal mechanisms to replace the fallen communist systems of Eastern Europe must surely count as one of the greatest organizational challenges of this century, and economists and politicians alike are constantly grappling with the enormity of the transformation to be achieved. In this volume, the authors give an in depth explanation of their now widely adopted approach to 'privatizing privatization' and chart the evolution of their thinking, particularly in reaction to real events and prevailing conditions. Expanding on the theme of transferring ownership to the private sector through a system of free vouchers and independent intermediaries, Professors Frydman and Rapaczynski address the dangers of bureaucratization and the delicate balance between the evolutionary elements and imposed regulations that must be achieved to make the transition a success. The perfect companion volume to The Privatization Process in Central Europe, this collection of essays provides a brilliant explanation of the most widely accepted theory of privatization in Eastern Europe today.

Privatization in Eastern Europe: Is the State Withering Away? (Central European University Press Book)

Capitalism with a Comrade's Face

Each of the essays in this collection dissects the upheaval in a particular institution in transition, such as central banking, the trade union movement, capital markets, or corporate governance. In a lively and accessible style, the authors bring out the links between what was and what will be in the social fabric of Eastern Europe and the former Soviet Union. They expose the fragility of political and economic institutions that can easily threaten the region's rebirth, but they also believe that many post-Communist countries are successfully seizing the opportunity to become reunited with the West and the global economy.

Capitalism With a Comrade's Face: Studies in the Postcommunist Transition

Murphy, Kenneth

Central European University Pr

See the best price to sell, buy, or rent books by Frydman, Roman. BookScouter helps to compare book prices from 25+ online bookstores and 30+ buyback vendors with a single search.

Books by Frydman, Roman

See the best price to sell, buy, or rent books by Frydman, Roman. BookScouter helps to compare book prices from 25+ online bookstores and 30+ buyback vendors with a single search.

Imperfect Knowledge Economics: Exchange Rates and Risk

Beyond Mechanical Markets: Asset Price Swings, Risk, and the Role of the State

The Privatization Process in Central Europe (CEU Privatization Reports)

The Privatization Process in Russia, Ukraine, and the Baltic States (CEU Privatization Reports)

The Privatization Process in Central Europe (CEU Privatization Reports)

The Privatization Process in Russia, the Ukraine, and the Baltic States (CEU Privatization Reports)

Privatization in Eastern Europe: Is the State Withering Away? (Central European University Press Book)

Capitalism With a Comrade's Face: Studies in the Postcommunist Transition