Portfolio adjustment and panic behavior under true uncertainty

Authors

Se Ho Kwak, Department of Economics, University of Massachusetts AmherstFollow

Working Paper Number

2022-18

Publication Date

2022

Abstract

G.L.S. Shackle was one of the representative critics against probability- based economic theory, and influenced some Post-Keynesians and Austri- ans. During the 1980s and 1990s, his alternative framework was math- ematically reconstructed by Katzner. In this paper, we will reformalize the Shackle-Katzner framework to explain the financial decision-making of the individual. For this, the portfolio diversification between two non- monetary assets will be explained by the reformalized model introduced here, and then moved to the analysis about a case of money and a non- monetary asset. Based on these findings, a few possible scenarios of panic behavior in the portfolio adjustment will be examined.

DOI

https://doi.org/10.7275/b908-zx08

License

UMass Amherst Open Access Policy

Recommended Citation

Kwak, Se Ho, "Portfolio adjustment and panic behavior under true uncertainty" (2022). Economics Department Working Paper Series. 335.
https://doi.org/10.7275/b908-zx08