Mountain View
biomedical and healthCAre Data Discovery Index Ecosystem
help Advanced Search
Title: The Real Versus the Financial Economy: A Global Tale of Stability Versus Volatility [Dataset]      
dateReleased:
10-31-2013
downloadURL: http://hdl.handle.net/1902.1/20294
ID:
hdl:1902.1/20294
description:
The question how the real and the financial side of a capitalist economy relate to each other has been a frequently recurring topic in the history of economic thought. Our paper addresses this question from the viewpoint that capital ultimately seeks returns from its perpetual reallocation and essentially faces two choices: it can either be “entrepreneurially” allocated to real economic activity, or it can be “financially” invested in legal claims against such activity. Adopting such a perspective, we study here how real and financial returns relate to each other over the past fifteen years, both within and across countries, by considering more than 30,000 publicly traded firms in more than forty countries that stand for 70% of the global population and about 90% of world income. We compare the average rates of return to both types of investment and their respective volatilities. While average returns, perhaps somewhat surprisingly, turn out to be roughly equal across the two domains, the volatility of financial returns exceeds ‘real volatility’ by an order of magnitude. From a systemic point of view, these findings raise the question why capital would seek out financial investments in the first place.
description:
Philipp Mundt, Niels Förster, Simone Alfarano, Mishael Milaković, 2013, "The Real Versus the Financial Economy: A Global Tale of Stability Versus Volatility [Dataset]", http://hdl.handle.net/1902.1/20294, Harvard Dataverse, V3
name:
Philipp Mundt, Niels Förster, Simone Alfarano, Mishael Milaković
homePage: http://www.harvard.edu/
name:
Harvard University
ID:
SCR:011273
abbreviation:
DataVerse
homePage: http://thedata.org/
name:
Dataverse Network Project
ID:
SCR:001997