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The current work gives an overview of the evolution of liberalism, the dominating current trend. The authors show that it does not hold the truth in economy because of both financial and democratic slippage. That is why they submit the model of the Sustainable Development where emphasis is put on the real economy which has turned into an economy for everyone and of all the stakeholders, based on the commitment to the community life. If liberalism promotes the interests of the transnational companies, the Sustainable Development focuses on citizens and on their involvement into the life of the city. That is how the triad is formed: transnational companies-state-community, where the citizen holds the central role, directly involved locally. [ABSTRACT FROM AUTHOR]

We propose a methodology to employ high frequency financial data to obtain estimates of volatility of log-prices which are not affected by microstructure noise and Lévy jumps. We introduce the “number of jumps” as a variable to explain and predict volatility and show that the number of jumps in SPY prices is an important variable to explain the daily volatility of the SPY log-returns, has more explanatory power than other variables (e.g., high and low, open and close), and has a similar explanatory power to that of the VIX. Finally, the number of jumps is very useful to forecast volatility and contains information that is not impounded in the VIX. [ABSTRACT FROM PUBLISHER]

Stability of the utility maximization problem with random endowment and indifference prices is studied for a sequence of financial markets in an incomplete Brownian setting. Our novelty lies in the nonequivalence of markets, in which the volatility of asset prices (as well as the drift) varies. Degeneracies arise from the presence of nonequivalence. In the positive real line utility framework, a counterexample is presented showing that the expected utility maximization problem can be unstable. A positive stability result is proved for utility functions on the entire real line. [ABSTRACT FROM AUTHOR]

This paper investigates the sensitivity of various financial markets to surprises in the federal funds rate. We employ the methodology outlined by Kuttner [2001] to reevaluate prior results and expand the analysis to include data up until the financial crisis, inclusive. Our data set includes additional events to previous studies, which led our results to differ than those earlier studies. For our sample excluding the financial crisis (1994-2007), we found that Fed funds surprises had a significant effect on the percent change in the S&P 500 index, but generally had little significant effect on Treasury yields and the trade-weighted dollar. We also studied a decomposition of the yield curve and found that the lack of significant effect on Treasury yields was a result of the offsetting effects of surprises on the term premium and risk-neutral yield. In addition, our analysis of the financial crisis revealed several shifts in the response of many asset classes, likely a result of the large signaling effects contained in monetary policy combined with the extraordinary events that were occurring. [ABSTRACT FROM AUTHOR]

The right questions to ask about China's future concern politics and policy, not financial markets or even the state of the economy. [ABSTRACT FROM AUTHOR]

Early models in finance posit that security prices respond quickly to new information and accurately reflect their fundamental values. More recent work indicates that market frictions and the psychological limitations of traders can cause asset prices to deviate from their fundamental values for a considerable length of time. In this paper, we develop an empirical method that tests for and estimates the degree of valuation bias. Being better able to detect valuation bias reveals profit opportunities and may improve the efficiency of financial markets if it sufficiently changes trader behavior. [ABSTRACT FROM AUTHOR]

The importance of connections between macroeconomic growth and financial markets is studied for a long time in the academic research. The special case of the developing countries, which is the case of the Central and Eastern European economies highlights this phenomenon even more, as many of them are still at the verge of reforming their economies. Our paper proposes the use of MIDAS regression in an analysis of the connections between macroeconomic growth and equity markets in this region in order to exhibit the importance of the latter for the reform strategies. [ABSTRACT FROM AUTHOR]

Nor the capitalism nor the communism prove to be the ideal systems. The second has imploded, while the first is transformed under the impact of the strong forces of globalization, crisis, technology, demography and ongoing ideas. It is looking for some kind of mixtum compozitum, which often prove just pure illusions. The crisis is proving to be a structural one, even a systemic one, not as cyclical as it was thought. The deepest wound of the current hyper-capitalism comes from its desecration and demoralization, reaching to some excessive consumption behaviors, speculation, virtualization, financialization, merchantability, alienation, manipulation etc. The background solution may come, in our opinion, only from a system's remoralization and re-enchantment, even though Hayek once said that the markets are amoral. [ABSTRACT FROM AUTHOR]