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Financial Markets Theory: Equilibrium, Efficiency and Information

Emilio Barucci

Springer Finance

This book is an all-inclusive presentation of the theory of financial markets. It covers a wide spectrum of topics and manages to present in a well-unified way all the main theoretical results that have been produced during the last fifty years. Central issues been discussed are agents behaviour under risk, portfolio selection, general equilibrium theory, risk premium and asset prising models, risk neutral evaluation, informational efficiency, etc.

The book balances between two different perspectives on the topic: on the one side the classical asset pricing theory and on the other side the comparison of theoretical results with empirical evidence. The author discusses much of the reported empirical evidence from financial markets by elaborating on several inconsistencies or ‘puzzles’ that have been emerged from the aforementioned comparison (e.g. the ‘equity-risk-premium’ puzzle). Recent developments inside the classical asset pricing theory or alternative paradigms (e.g. behavioural finance) that have been proposed to solve such puzzles are extensively analysed.

‘Financial Markets Theory’ is not just another book on the topic! The way of approaching several issues on financial theory makes it unique among others. E. Barucci offers academic researchers or practitioners a valuable handbook of recent developments and an excellent map of the financial literature. The interested reader will find more than 1500 (!) references to consult.

Reviewed by Nikos Thomaidis, Dept. of Financial and Management Engineering, University of Aegean, Chios Island, Greece. Click here to buy this book at Amazon.co.uk.

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