Skip to content

Macroeconomics

04/08/2015

At 2008 Macro-economist have done quite a good job if compared to the macro-economic mistakes done by them before WWII, at 1929. The economists definitely improved their prediction tools since then.
In the microeconomics level, if you mean by it the stock prices in the stock exchange, all the models on the long-time failed and will fail. The fundamental value evaluation of corporations with publicly traded shares is very problematic, since it is based mainly on predictions of expected future performances. These predictions in one hand take in account the past performance of the company, but also many other more subjective factors, like management team, market share, future of the main products of the company, etc. But above all this stands the problematic position of the top managers of corporations, with publicly exchanged shares, who usually are not a majority stake shareholders, but professional managers, whose not always represent the shareholders long term interests. Adding to these difficulties many times lack of enough expertise of the brokers to analyze companies, most of the active players in the stock exchange act as short term investors, who speculate on gaining in the short term profits out of fluctuation of the share price. In such a market the share price booms and slumps of the whole market are inevitable, and unpredictable. Since so, the economic models about the share prices, even if mathematical are more interested in human behavior, than in fundamental value of the companies.

Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

Eamonn Blaneys Website

"A mind of integrity is the most glorious possession" - Family motto

rogeq.wordpress.com/

Explain Explore Enlighten

Mostly Economics

This blog covers research work in Economics with focus on India.

Econometricus.com

Data-Driven Economics.

Economic Sociology and Political Economy

The global community of academics, practitioners, and activists interested in Economic Sociology & Political Economy -- led by Oleg Komlik

WebInvestigator.KK.org - by F. Kaskais

Web Investigator.KK. org... is one web investigative resource for searching thousands of online sources, and public databases. This blog will change your life!

Wiser, Braver, More Optimistic

A blog about books and ideas

eddiegirdner

Writer Traveler Leica Photographer

TPPA = CRISIS

Political economy, social policy, the coming end of Neoliberalism, Trump . . . and other facts of our times.

Seven Spheres

Aqua Terra Ignis et Aer

%d bloggers like this: