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Author
Willet Thomas D. (Claremont Institute for Economic Policy Studies, Claremont, California, USA)
Title
Some Implications of Behavioral Finance for International Monetary Analysis
Source
Economics and Business Review, 2024, vol. 10 (24), nr 1, s. 7-29, bibliogr. 39 poz.
Keyword
Finanse behawioralne, Przepływy kapitałowe, Efektywność rynku, Analiza finansowa, Makroekonomia gospodarki otwartej
Behavioural finance, Capital flows, Market effectiveness, Financial analysis, Open economy macroeconomics
Note
JEL Classification: E7, F3, G4
summ.
Abstract
This paper discusses some of the important insights from behavioral finance for international monetary and financial analysis. A broad approach to behavioral finance is advocated which includes analysis of the effects of uncertainty, perverse incentives, and complexity economics as well as the cognitive biases focused on in the initial contributions to behavioral finance. It offers reasons why capital mobility is often not perfect and expectations are sometimes not rational. Correctly interpreted it is not a wholesale attack on efficient market theory but rather argues that markets can behave differently at different times, being efficient sometimes and subject to destabilize or insufficiently stabilizing speculation at others and focuses on the conditions that make different types of behavior more likely. It helps provide insights into issues such as currency crisis, the effects of official intervention in foreign exchange markets, the international monetary trilemma, capital flow surges and reversals, the discipline effects of fixed exchange rates and international financial markets and why uncovered interest rate parity often does not hold. (original abstract)
Accessibility
The Library of Warsaw School of Economics
The Library of University of Economics in Katowice
The Main Library of Poznań University of Economics and Business
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Bibliography
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ISSN
2392-1641
Language
eng
URI / DOI
https://doi.org/10.18559/ebr.2024.1.1193
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