What is the price of time? What is the price of risk? How do markets allocate resources across time and uncertain states of the world? This course theoretically studies how markets allocate scarce resource across time and when outcomes are risky. The “goods” in such markets are called “assets” and the prices of “assets” determine the cost of trading resources across time and across uncertain states of the world. We theoretically investigate how equilibrium determines the price of time, then asset price implications; then asset allocations and prices in the presence of risk; finally, implications for new assets.
The Class: Type: lecture
Requirements/Evaluation: problem sets and exams
Extra Info: may not be taken on a pass/fail basis
Prerequisites: ECON 251 or ECON 252; and ECON 255 or STAT 201
Distributions: Division II; Quantative/Formal Reasoning;