Year: 2006
Type: article
Abstract: An evaluation of Stiglitz's Contributions to the Theory of the Financial Markets.The objective and originality of this paper lie in identifying Stiglitz's main theoretical contributions to Financial Economics and in briefly portraying the contemporary economic thought out of which these contributions emerged as well as in suggesting their connections with the subsequent economic thought.Grounded on a detailed analysis of Stiglitz's works on finance, his most important theoretical findings are singled out and gathered into four issues: (1) the conditions under which the Modigliani-Miller theorem is valid; (2) the inconsistency inherent to the efficient market hypothesis; (3) the microeconomic effects of asymmetrical information in financial markets; and (4) its real macroeconomic effects.In all of these topics, the focal point of Stiglitz's theoretical research is the unrealistic underpinnings on which the Arrow-Debreu competitive equilibrium model relies.It is also emphasised that this same perspective he coherently followed to construct a fullyfledged theoretical framework would be preserved in his empirical investigations, notably about developing countries, on which he has concentrated effort since the beginnings of the nineties.
Author: Dante Mendes Aldrighi
Institution: Universidade de São Paulo
Language: Portuguese
Topic: Economic theories and models
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W2070967102