Pricing, liquidity and the control of dynamic systems in finance and economics

MPRA Paper from University Library of Munich, Germany

Abstract: The paper discusses various practical consequences of treating economics and finance as an inherently dynamic and chaotic system. On the theoretical side this looks at the general applicability of the market-making pricing approach to economics in general. The paper also discuses the consequences of the endogenous creation of liquidity and the role of liquidity as a state variable. On the practical side, proposals are made for reducing chaotic behaviour in both housing markets and stock markets.

Keywords: dynamic; chaotic; liquidity; market-microstructure; post-keynesian (search for similar items in EconPapers)
JEL-codes: D40 D53 G1 (search for similar items in EconPapers)
Date: 2011-05-26
New Economics Papers: this item is included in nep-hpe and nep-mst
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https://mpra.ub.uni-muenchen.de/31137/1/MPRA_paper_31137.pdf original version (application/pdf)

Related works:
Working Paper: Pricing, liquidity and the control of dynamic systems in finance and economics (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:31137

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