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On the Optimality of the Stock Market Allocation of Investment

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  • J. E. Stiglitz

Abstract

I. Introduction, 25.— II. The basic model, 27.— III. Determination of the level of investment in a mean variance model, 32. — IV. Choice of technique, 47. — V. Remarks on alternative models of market equilibrium, 52.— VI. Concluding remarks, 55. — Appendix, 57.

Suggested Citation

  • J. E. Stiglitz, 1972. "On the Optimality of the Stock Market Allocation of Investment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 86(1), pages 25-60.
    • Handle: RePEc:oup:qjecon:v:86:y:1972:i:1:p:25-60.
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    File URL: http://hdl.handle.net/10.2307/1880492
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    Cited by:

    1. Luis H. B. Braido & V. Filipe Martins†da†Rocha, 2018. "Output Contingent Securities And Efficient Investment By Firms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(2), pages 989-1012, May.
    2. David F. Bradford, 1989. "Market Value Vs. Financial Accounting Measures of National Saving," NBER Working Papers 2906, National Bureau of Economic Research, Inc.
    3. Konrad, Kai A., 1992. "Risikoproduktivität," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 112652, July.
    4. Krainer, Robert E., 2013. "Towards a program for financial stability," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 207-218.
    5. Miguel Antón & Florian Ederer & Mireia Giné & Martin Schmalz, 2023. "Common Ownership, Competition, and Top Management Incentives," Journal of Political Economy, University of Chicago Press, vol. 131(5), pages 1294-1355.
    6. Krainer, Robert, 2009. "Portfolio and financing adjustments for U.S. banks: Some empirical evidence," Journal of Financial Stability, Elsevier, vol. 5(1), pages 1-24, January.
    7. Zhao, Guo, 2021. "Determining Capital Structure within Arbitrage-Based Production Framework," MPRA Paper 108492, University Library of Munich, Germany.
    8. Drèze, Jacques H., 1979. "La prise de décision en situation d’incertitude," L'Actualité Economique, Société Canadienne de Science Economique, vol. 55(2), pages 129-150, avril.
    9. Krainer, Robert E., 2017. "Economic stability under alternative banking systems: Theory and policy," Journal of Financial Stability, Elsevier, vol. 31(C), pages 107-118.
    10. Nidhiya Menon & Narayanan Subramanian, 2008. "Learning, diversification and the nature of risk," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 35(1), pages 117-145, April.
    11. Nicholas Stern & Joseph E Stiglitz, 2023. "Climate change and growth," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(2), pages 277-303.
    12. Vesa Kanniainen, 1993. "Optimal production of innovations under uncertainty," Journal of Economics, Springer, vol. 57(2), pages 147-168, June.
    13. Nitzan Weiss, 1984. "Reply to a Paradigmatic Comment: Capital Markets, Output, and the Demand for Inputs under Uncertainty," Eastern Economic Journal, Eastern Economic Association, vol. 10(1), pages 79-85, Jan-Mar.
    14. William J. Marshall & Jess B. Yawitz & Edward Greenberg, 1984. "Incentives for Diversification and the Structure of the Conglomerate Firm," NBER Working Papers 1280, National Bureau of Economic Research, Inc.
    15. James E. Smith, 2004. "Risk Sharing, Fiduciary Duty, and Corporate Risk Attitudes," Decision Analysis, INFORMS, vol. 1(2), pages 114-127, June.
    16. Jean‐Jacques Laffont, 1989. "A Brief Overview of the Economics of Incomplete Markets," The Economic Record, The Economic Society of Australia, vol. 65(1), pages 54-65, March.
    17. Joseph E. Stiglitz, 1991. "The Invisible Hand and Modern Welfare Economics," NBER Working Papers 3641, National Bureau of Economic Research, Inc.
    18. Joseph E. Stiglitz, 1991. "Symposium on Organizations and Economics," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 15-24, Spring.
    19. Joseph E. Stiglitz, 2017. "The Revolution of Information Economics: The Past and the Future," NBER Working Papers 23780, National Bureau of Economic Research, Inc.
    20. Ramser, Hans Jürgen, 1975. "Neuere Ansätze in der Theorie der Firma und ihre wettbewerbspolitischen Implikationen," Discussion Papers, Series I 70, University of Konstanz, Department of Economics.
    21. Antonio Torrero Mañas, 2005. "The increasing relevance of the stock market in the world: A new scenario," Working Papers 01/05, Instituto Universitario de Análisis Económico y Social.
    22. David M. Kreps, 1982. "Multiperiod Securities and the Efficient Allocation of Risk: A Comment on the Black-Scholes Option Pricing Model," NBER Chapters, in: The Economics of Information and Uncertainty, pages 203-232, National Bureau of Economic Research, Inc.
    23. repec:bas:econth:y:2012:i:2:p:35-56 is not listed on IDEAS
    24. repec:bas:econth:y:2012:i:2:p:57-75 is not listed on IDEAS

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