What Does Matter in Economy Today: When Human Psychology Drives Financial Markets
This paper provides the first evidence for empirical tests of the impact of rational expectations as well as behavioral biases, including among other animal spirits such as defined by Akerlof and Shiller on the variability of trading. Using a daily data for five international capital markets in deve...
| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
Business School, Holy Spirit University of Kaslik (USEK)
2015-06-01
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| Series: | Arab Economic and Business Journal |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214462515000055 |
| _version_ | 1797227229461086208 |
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| author | Abderrazak Dhaoui |
| author_facet | Abderrazak Dhaoui |
| author_sort | Abderrazak Dhaoui |
| collection | DOAJ |
| description | This paper provides the first evidence for empirical tests of the impact of rational expectations as well as behavioral biases, including among other animal spirits such as defined by Akerlof and Shiller on the variability of trading. Using a daily data for five international capital markets in developed countries, strong evidence is found. The hypothesis of rationality fails to determine the investors’ trading behavior. The economy is, however, driven by behavioral biases, including more especially animal spirits summarized in investors’ sentiments and beliefs. |
| first_indexed | 2024-04-24T14:37:29Z |
| format | Article |
| id | doaj.art-7e3089e5a29241bfb2dcfc27a92066ee |
| institution | Directory Open Access Journal |
| issn | 2214-4625 |
| language | English |
| last_indexed | 2024-04-24T14:37:29Z |
| publishDate | 2015-06-01 |
| publisher | Business School, Holy Spirit University of Kaslik (USEK) |
| record_format | Article |
| series | Arab Economic and Business Journal |
| spelling | doaj.art-7e3089e5a29241bfb2dcfc27a92066ee2024-04-02T23:08:21ZengBusiness School, Holy Spirit University of Kaslik (USEK)Arab Economic and Business Journal2214-46252015-06-01101394710.1016/j.aebj.2014.12.002What Does Matter in Economy Today: When Human Psychology Drives Financial MarketsAbderrazak DhaouiThis paper provides the first evidence for empirical tests of the impact of rational expectations as well as behavioral biases, including among other animal spirits such as defined by Akerlof and Shiller on the variability of trading. Using a daily data for five international capital markets in developed countries, strong evidence is found. The hypothesis of rationality fails to determine the investors’ trading behavior. The economy is, however, driven by behavioral biases, including more especially animal spirits summarized in investors’ sentiments and beliefs.http://www.sciencedirect.com/science/article/pii/S2214462515000055OptimismPessimismSpontaneous reactionOverconfidenceRationalityTrading volume |
| spellingShingle | Abderrazak Dhaoui What Does Matter in Economy Today: When Human Psychology Drives Financial Markets Arab Economic and Business Journal Optimism Pessimism Spontaneous reaction Overconfidence Rationality Trading volume |
| title | What Does Matter in Economy Today: When Human Psychology Drives Financial Markets |
| title_full | What Does Matter in Economy Today: When Human Psychology Drives Financial Markets |
| title_fullStr | What Does Matter in Economy Today: When Human Psychology Drives Financial Markets |
| title_full_unstemmed | What Does Matter in Economy Today: When Human Psychology Drives Financial Markets |
| title_short | What Does Matter in Economy Today: When Human Psychology Drives Financial Markets |
| title_sort | what does matter in economy today when human psychology drives financial markets |
| topic | Optimism Pessimism Spontaneous reaction Overconfidence Rationality Trading volume |
| url | http://www.sciencedirect.com/science/article/pii/S2214462515000055 |
| work_keys_str_mv | AT abderrazakdhaoui whatdoesmatterineconomytodaywhenhumanpsychologydrivesfinancialmarkets |