Imperfect Knowledge

Every banking crisis has its own overarching narratives and coincidental streams of various sub-narratives that course through the marketplace day to day.

In a new book, How Novelty and Narratives Drive the Stock Market, economist Nicholas Mangee examines the influence of stories on stock market outcomes in an uncertain world.

A formal argument that Kahneman and Tversky’s compelling empirical findings, and those of other behavioral economists, do not provide a basis for a general approach to specifying participants’ “predictable errors.”

A new view of stock market instability under Knightian uncertainty

A tractable formalization of the Knightian uncertainty faced by an economist and market participants in an intertemporal asset-price model.

Stock-Price Volatility During the Pandemic

Stock-Price Volatility During the Pandemic

INET’s President introduces a new research program that challenges orthodox assumptions about the limits of economic knowledge

This paper introduces the Knightian Uncertainty Hypothesis (KUH), a new approach to macroeconomics and finance theory.

Asset markets are indispensable in harnessing society’s diverse views and insights about future business performance. But those views are shaped as much by emotion and crowd mentality as by rational expectations.

Asset markets are indispensable in harnessing society’s diverse views and insights about future business performance. But those views are shaped as much by emotion and crowd mentality as by rational expectations.

In the face of  laissez-faire capitalism at home and resurgent nationalism across the globe, INET offers an innovative look at the causes of—and solutions for—the problems that ail a fissuring world economy.

The World Economic Roundtable seeks to help the business, investment, and policy communities understand ongoing changes in the world economy and to promote a discussion of ideas that can advance the goal of a widely shared global prosperity.

After re-iterating five well-known theorems about the properties of conditional expectations in stationary settings—such as providing unbiased minimum mean square error predictions despite in- complete information, and the law of iterated expectations—we clarify unpredictability and illustrate its prevalence empirically.

In the paper that we present this afternoon, Soren Johansen, Anders Rahbek, Morten Tabor, and I introduce the Qualitative Expectations Hypothesis (QEH) as a new approach to modeling macroeconomic and financial outcomes.