43 citations · 65 across the 10 of their papers we have counts for
11 papers
News-driven Expectations and Volatility Clustering
Sabiou Inoua
Financial volatility obeys two fascinating empirical regularities that apply to various assets, on various markets, and on various time scales: it is fat-tailed (more precisely pow…
Perishable Goods versus Re-tradable Assets: A Theoretical Reappraisal of a Fundamental Dichotomy
Sabiou Inoua, Vernon Smith
Experimental results on market behavior establish a lower stability and efficiency of markets for durable re-tradable assets compared to markets for non-durable, or perishable, goo…
Classical Economics: Lost and Found
Sabiou Inoua, Vernon Smith
"Economists miss the boat when they act as if Arrow and Debreu's general equilibrium model accurately describes markets in the real world of constant change. In contrast, the class…
The Classical Theory of Supply and Demand
Sabiou Inoua, Vernon Smith
This paper introduces and formalizes the classical view on supply and demand, which, we argue, has an integrity independent and distinct from the neoclassical theory. Demand and su…
Adam Smith's Theory of Value: A Reappraisal of Classical Price Discovery
Sabiou Inoua, Vernon Smith
The relevance of Adam Smith for understanding human morality and sociality is recognized in the growing interest in his work on moral sentiments among scholars of various academic…
A Classical Model of Speculative Asset Price Dynamics
Sabiou Inoua, Vernon Smith
In retrospect, the experimental findings on competitive market behavior called for a revival of the old, classical, view of competition as a collective higgling and bargaining proc…
Beware the Gini Index! A New Inequality Measure
Sabiou Inoua
The Gini index underestimates inequality for heavy-tailed distributions: for example, a Pareto distribution with exponent 1.5 (which has infinite variance) has the same Gini index…
The Random Walk behind Volatility Clustering
Sabiou Inoua
Financial price changes obey two universal properties: they follow a power law and they tend to be clustered in time. The second regularity, known as volatility clustering, entails…
Speculation and Power Law
Sabiou Inoua
It is now well established empirically that financial price changes are distributed according to a power law, with cubic exponent. This is a fascinating regularity, as it holds for…
A Simple Measure of Economic Complexity
Sabiou Inoua
Contrary to conventional economic growth theory, which reduces a country's output to one aggregate variable (GDP), product diversity is central to economic development, as recent '…
The Intrinsic Instability of Financial Markets
Sabiou Inoua
In this paper we explain the wild fluctuations of financial prices from the intrinsic amplifying feedback of speculative supply and demand. Formally, we show that an asset return f…