Book description
An updated look at what Fischer Black's ideas on business cycles and
equilibrium mean today
Throughout his career, Fischer Black described a view of business
fluctuations based on the idea that a well-developed economy will be
continually in equilibrium. In the essays that constitute this book,
which is one of only two books Black ever wrote, he explores this idea
thoroughly and reaches some surprising conclusions.
With the newfound popularity of quantitative finance and risk
management, the work of Fischer Black has garnered much attention.
Business Cycles and Equilibrium-with its theory that economic
and financial markets are in a continual equilibrium-is one of his
books that still rings true today, given the current economic crisis.
This Updated Edition clearly presents Black's classic theory on
business cycles and the concept of equilibrium, and contains a new
introduction by the person who knows Black best: Perry Mehrling,
author of Fischer Black and the Revolutionary Idea of Finance
(Wiley). Mehrling goes inside Black's life to uncover what was
occurring during the time Black wrote Business Cycles and
Equilibrium, while also shedding light on what Black would make of
today's financial and economic meltdown and how he would best advise
to move forward.
The essays within this book reach some interesting conclusions
concerning the role of equilibrium in a developed economy
- Warns about the use and abuse of modeling
- Explains the risky business of risk in a straightforward and
accessible style
- Contains chapters dedicated to "the effects of uncontrolled
banking," "the trouble with econometric models,"
and "the effects of noise on investing"
- Includes commentary on Black's life and work at the time
Business Cycles and Equilibrium was written as well as
insight as to what Black would make of the current financial meltdown
Engaging and informative, the Updated Edition of Business
Cycles and Equilibrium will give you a better understanding of
what is really going on during these uncertain and volatile financial
times.
Fischer Black is regarded as one of the great
innovators of modern finance theory. He is most famous for cofounding
the legendary Black-Scholes equation, although he contributed much
more to finance in the areas of portfolio insurance, commodity futures
pricing, bond swaps, interest rate futures, and global asset
allocation models. Black worked at the University of Chicago and the
MIT Sloan School of Management, as well as Goldman Sachs. He received
his PhD in applied mathematics from Harvard University. Black died in
1995, two years before the Nobel Prize was awarded to Myron Scholes
and Robert C. Merton for their work on option pricing. Since the Nobel
Prize is not given posthumously, Black was given a prominent mention
for the key role he played in developing the equation.
