Does Adam Smiths Invisible Hand Work for Financial Markets: Comments

Amaresh Das

Does Adam Smiths Invisible Hand Work for Financial Markets: Comments

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Does Adam Smiths Invisible Hand Work for Financial Markets: Comments

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Abstract

Adam Smith theory of the Invisible Hand is fundamentally flawed. The neoclassical theory based on it relies on market models in which economic agents interact with the market forces that are not governed by Universal Law of Nature; such models ignore correlations that lead to booms and depressions. To prove rigorous theorems financial economists also assume that market fluctuations follow a certain statistical distribution a la a thermodynamic equilibrium approach. Do they really score a major breakthrough? No -the dominant ‘equilibrium principle’ of the market is only a hope, not a reality: It lacks proper empirical underpinning. Statistics and mathematics do not help.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

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How to Cite This Article

Amaresh Das. 2015. "Does Adam Smiths Invisible Hand Work for Financial Markets: Comments". Global Journal of Management and Business Research, Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 15 (GJMBR Volume 15 Issue C1).

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GJMBR Volume 15 Issue C1

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords

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Classification

GJMBR-C Classification JEL Code: N20

Submission ReceivedFebruary 5, 2015
Peer Review Double Blind
Handling Editor
Accepted March 1, 2015
Published March 15, 2015

Version of record

v1.2

Issue date

February 15, 2015

Language

English

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Article Matrices

Total Score: 178

Country: United States

Subject: Global Journal of Management and Business Research

Authors: Amaresh Das (PhD/Dr. count: 0)

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