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List of unsolved problems in economics

Index List of unsolved problems in economics

This is a list of some of the major unsolved problems, puzzles, or questions in neoclassical economics. [1]

57 relations: American Economic Association, Backus–Kehoe–Kydland puzzle, Behavioral economics, Binomial options pricing model, Black–Scholes model, Bounded rationality, Call option, Cambridge University Press, Charles Horioka, Confirmation bias, Critical Review (journal), Dividend, Dividend puzzle, Equity home bias puzzle, Equity premium puzzle, European Journal of International Relations, Exchange rate, Feldstein–Horioka puzzle, Framing (social sciences), Gambler's fallacy, General equilibrium theory, Herd behavior, Hill climbing, Home bias in trade puzzle, Homo economicus, Information asymmetry, Investor, Journal of Economic Literature, Journal of Economic Perspectives, Journal of Political Economy, Local volatility, Loss aversion, Martin Feldstein, MIT Press, Modigliani–Miller theorem, Momentum investing, Nominal rigidity, OECD, Option style, Oskar Morgenstern, Partial differential equation, Princeton University Press, Private equity, Prospect theory, Put option, Real exchange-rate puzzles, Revealed preference, Risk aversion, Royal Swedish Academy of Sciences, Shock (economics), ..., Stochastic volatility, The Journal of Finance, The New York Times, The RAND Journal of Economics, Valuation (finance), Volatility (finance), Walrasian auction. Expand index (7 more) »

American Economic Association

The American Economic Association (AEA) is a learned society in the field of economics, headquartered in Nashville, Tennessee.

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Backus–Kehoe–Kydland puzzle

In economics, the Backus–Kehoe–Kydland consumption correlation puzzle, also known as the BKK puzzle, is the observation that consumption is much less correlated across countries than output.

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Behavioral economics

Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory.

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Binomial options pricing model

In finance, the binomial options pricing model (BOPM) provides a generalizable numerical method for the valuation of options.

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Black–Scholes model

The Black–Scholes or Black–Scholes–Merton model is a mathematical model for the dynamics of a financial market containing derivative investment instruments.

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Bounded rationality

Bounded rationality is the idea that when individuals make decisions, their rationality is limited by the tractability of the decision problem, the cognitive limitations of their minds, and the time available to make the decision.

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Call option

A call option, often simply labeled a "call", is a financial contract between two parties, the buyer and the seller of this type of option.

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Cambridge University Press

Cambridge University Press (CUP) is the publishing business of the University of Cambridge.

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Charles Horioka

Charles Yuji Horioka (born September 7, 1956 in Boston, Massachusetts) is a Japanese-American economist residing in Japan.

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Confirmation bias

Confirmation bias, also called confirmatory bias or myside bias,David Perkins, a professor and researcher at the Harvard Graduate School of Education, coined the term "myside bias" referring to a preference for "my" side of an issue.

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Critical Review (journal)

Critical Review: A Journal of Politics and Society is a quarterly academic journal covering political science that is published by Routledge for the Critical Review Foundation.

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Dividend

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits.

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Dividend puzzle

The dividend puzzle is a concept in finance in which companies that pay dividends are rewarded by investors with higher valuations, even though, according to many economists, it should not matter to investors whether a firm pays dividends or not.

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Equity home bias puzzle

The Equity home bias puzzle is the term given to describe the fact that individuals and institutions in most countries hold only modest amounts of foreign equity.

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Equity premium puzzle

The equity premium puzzle refers to the inability of an important class of economic models to explain the average premium of a well-diversified U.S. equity portfolio over U.S. Treasury Bills observed for more than 100 years.

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European Journal of International Relations

The European Journal of International Relations is a quarterly peer-reviewed academic journal covering international relations.

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Exchange rate

In finance, an exchange rate is the rate at which one currency will be exchanged for another.

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Feldstein–Horioka puzzle

The Feldstein–Horioka puzzle is a widely discussed problem in macroeconomics and international finance, which was first documented by Martin Feldstein and Charles Horioka in a 1980 paper.

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Framing (social sciences)

In the social sciences, framing comprises a set of concepts and theoretical perspectives on how individuals, groups, and societies, organize, perceive, and communicate about reality.

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Gambler's fallacy

The gambler's fallacy, also known as the Monte Carlo fallacy or the fallacy of the maturity of chances, is the mistaken belief that, if something happens more frequently than normal during a given period, it will happen less frequently in the future.

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General equilibrium theory

In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an overall general equilibrium.

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Herd behavior

Herd behavior describes how individuals in a group can act collectively without centralized direction.

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Hill climbing

In numerical analysis, hill climbing is a mathematical optimization technique which belongs to the family of local search.

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Home bias in trade puzzle

The Home bias in trade puzzle is a widely discussed problem in macroeconomics and international finance, first documented by John T. McCallum in an article from 1995.

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Homo economicus

The term homo economicus, or economic man, is a caricature of economic theory framed as a "mythical species" or word play on homo sapiens, and used in pedagogy.

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Information asymmetry

In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other.

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Investor

An investor is a person that allocates capital with the expectation of a future financial return.

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Journal of Economic Literature

The Journal of Economic Literature is a peer-reviewed academic journal, published by the American Economic Association, that surveys the academic literature in economics.

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Journal of Economic Perspectives

The Journal of Economic Perspectives (JEP) is an economic journal published by the American Economic Association.

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Journal of Political Economy

The Journal of Political Economy is a bimonthly peer-reviewed academic journal published by the University of Chicago Press.

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Local volatility

A local volatility model, in mathematical finance and financial engineering, is one that treats volatility as a function of both the current asset level S_t and of time t. As such, a local volatility model is a generalisation of the Black-Scholes model, where the volatility is a constant (i.e. a trivial function of S_t and t).

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Loss aversion

In cognitive psychology and decision theory, loss aversion refers to people's tendency to prefer avoiding losses to acquiring equivalent gains: it is better to not lose $5 than to find $5.

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Martin Feldstein

Martin Stuart "Marty" Feldstein (born November 25, 1939) is an American economist.

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MIT Press

The MIT Press is a university press affiliated with the Massachusetts Institute of Technology (MIT) in Cambridge, Massachusetts (United States).

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Modigliani–Miller theorem

The Modigliani–Miller theorem (of Franco Modigliani, Merton Miller) is an influential element of economic theory; it forms the basis for modern thinking on capital structure.

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Momentum investing

Momentum investing is a system of buying stocks or other securities that have had high returns over the past three to twelve months, and selling those that have had poor returns over the same period.

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Nominal rigidity

Nominal rigidity, also known as price-stickiness or wage-stickiness, describes a situation in which the nominal price is resistant to change.

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OECD

The Organisation for Economic Co-operation and Development (OECD; Organisation de coopération et de développement économiques, OCDE) is an intergovernmental economic organisation with 35 member countries, founded in 1961 to stimulate economic progress and world trade.

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Option style

In finance, the style or family of an option is the class into which the option falls, usually defined by the dates on which the option may be exercised.

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Oskar Morgenstern

Oskar Morgenstern (January 24, 1902 – July 26, 1977) was a German-born economist.

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Partial differential equation

In mathematics, a partial differential equation (PDE) is a differential equation that contains unknown multivariable functions and their partial derivatives.

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Princeton University Press

Princeton University Press is an independent publisher with close connections to Princeton University.

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Private equity

Private equity typically refers to investment funds organized as limited partnerships that are not publicly traded and whose investors are typically large institutional investors, university endowments, or wealthy individuals.

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Prospect theory

Prospect theory is a behavioral economic theory that describes the way people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known (.

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Put option

In finance, a put or put option is a stock market device which gives the owner of a put the right, but not the obligation, to sell an asset (the underlying), at a specified price (the strike), by a predetermined date (the expiry or maturity) to a given party (the seller of the put).

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Real exchange-rate puzzles

The real exchange-rate puzzles is a common term for two much-discussed anomalies of real exchange rates: that real exchange rates are more volatile and show more persistence than what most models can account for.

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Revealed preference

Revealed preference theory, pioneered by economist Paul Samuelson, is a method of analyzing choices made by individuals, mostly used for comparing the influence of policies on consumer behavior.

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Risk aversion

In economics and finance, risk aversion is the behavior of humans (especially consumers and investors), when exposed to uncertainty, in attempting to lower that uncertainty.

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Royal Swedish Academy of Sciences

The Royal Swedish Academy of Sciences or Kungliga Vetenskapsakademien is one of the Royal Academies of Sweden.

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Shock (economics)

In economics, a shock is an unexpected or unpredictable event that affects an economy, either positively or negatively.

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Stochastic volatility

In statistics, stochastic volatility models are those in which the variance of a stochastic process is itself randomly distributed.

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The Journal of Finance

The Journal of Finance is a peer-reviewed academic journal published by Wiley-Blackwell on behalf of the American Finance Association.

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The New York Times

The New York Times (sometimes abbreviated as The NYT or The Times) is an American newspaper based in New York City with worldwide influence and readership.

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The RAND Journal of Economics

The RAND Journal of Economics (usually called Rand Journal or simply Rand) is a peer-reviewed scholarly journal of economics published quarterly by Wiley-Blackwell on behalf of the RAND Corporation.

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Valuation (finance)

In finance, valuation is the process of determining the present value (PV) of an asset.

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Volatility (finance)

In finance, volatility (symbol σ) is the degree of variation of a trading price series over time as measured by the standard deviation of logarithmic returns.

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Walrasian auction

A Walrasian auction, introduced by Léon Walras, is a type of simultaneous auction where each agent calculates its demand for the good at every possible price and submits this to an auctioneer.

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Redirects here:

List of unsolved problems in finance, Morgenstern's thirteen problems, Unsolved problems in economics.

References

[1] https://en.wikipedia.org/wiki/List_of_unsolved_problems_in_economics

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