The Real Effects of Financial Markets

  title={The Real Effects of Financial Markets},
  author={P. Bond and Alex Edmans and I. Goldstein},
  journal={Review of Financial Economics},
  • P. Bond, Alex Edmans, I. Goldstein
  • Published 2012
  • Economics
  • Review of Financial Economics
  • A large amount of activity in the financial sector occurs in secondary financial markets, where securities are traded among investors without capital flowing to firms. The stock market is the archetypal example, which in most developed economies captures a lot of attention and resources. Is the stock market just a sideshow or does it affect real economic activity? In this review, we discuss the potential real effects of financial markets that stem from the informational role of market prices… CONTINUE READING
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