• Summary
  • Contents
  • Subject index

Interest in economics is at an all-time high. Among the challenges facing the nation is an economy with rapidly rising unemployment, failures of major businesses and industries, and continued dependence on oil with its wildly fluctuating price. Economists have dealt with such questions for generations, but they have taken on new meaning and significance.Tackling these questions and encompassing analysis of traditional economic theory and topics as well as those that economists have only more recently addressed, 21st Century Economics: A Reference Handbook is a must-have reference resource.Key FeaturesProvides highly readable summaries of theory and models in key areas of micro and macroeconomics, helpful for students trying to get a "big picture" sense of the fieldIncludes introductions to relevant theory as well as empirical evidence, useful for readers interested in learning about economic analysis of an issue as well for students embarking on research projectsFeatures chapters focused on cutting-edge topics with appeal for economists seeking to learn about extensions of analysis into new areas as well as new approaches Presents models in graphical format and summarizes empirical evidence in ways that do not require much background in statistics or econometrics, so as to maximize accessibility to students.

Asset Pricing Models
Asset pricing models

One of the central questions in financial economics is how to assign a correct value to an asset that provides a stream of uncertain future cash flows. At the most general level, the solution is simple: The price of the asset today equals the expected discounted value of its future payoffs. This discounting—the assignment of a (usually) lower present value to future cash flows—reflects the time and risk dimensions of the payoffs offered by the asset. First, most investors value a dollar received today more than they value a dollar received tomorrow. Consequently, they are willing to pay less than one dollar today for a dollar that they will receive in the future. This is the time dimension of asset ...

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