"Lec 6 - Irving Fisher's Impatience Theory of Interest" Financial Theory (ECON 251) Building on the general equilibrium setup solved in the last week, this lecture looks in depth at the relationships between productivity, patience, prices, allocations, and nominal and real interest rates. The solutions to three of Fisher's famous examples are given: What happens to interest rates when people become more or less patient? What happens when they expect to receive windfall riches sometime in the future? And, what happens when wealth in an economy is redistributed from the poor to the rich? 00:00 - Chapter 1. From Financial to General Equilbrium 06:44 - Chapter 2. Applying the Principle of No Arbitrage 23:50 - Chapter 3. The Fundamental Theorem of Asset Pricing 39:25 - Chapter 4. Effects of Technology in Fisher Economy 51:31 - Chapter 5. The Impatience Theory of Interest 01:06:48 - Chapter 6. Conclusion Complete course materials are available at the Open Yale Courses website: http://open.yale.edu/courses This course was recorded in Fall 2009.
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Lec 2- Utilities, Endowments, and Equilibrium
Lec 4- Efficiency, Assets, and Time
Lec 5- Present Value Prices and the Real Rate of Interest
Lec 7 - Shakespeare's Merchant of Venice and Collateral, Present Value and the Vocabulary of Finance
Lec 8 - How a Long-Lived Institution Figures an Annual Budget. Yield
Lec 10 - Dynamic Present Value
Lec 12 - Overlapping Generations Models of the Economy
Lec 13 - Demography and Asset Pricing: Will the Stock Market Decline when the Baby Boomers Retire?
Lec 14 - Quantifying Uncertainty and Risk
Lec 15 - Uncertainty and the Rational Expectations Hypothesis
Lec 16 - Backward Induction and Optimal Stopping Times
Lec 17 - Callable Bonds and the Mortgage Prepayment Option
Lec 18 - Modeling Mortgage Prepayments and Valuing Mortgages
Lec 19 - History of the Mortgage Market: A Personal Narrative
Lec 21 - Dynamic Hedging and Average Life
Lec 22 - Risk Aversion and the Capital Asset Pricing Theorem
Lec 23 - The Mutual Fund Theorem and Covariance Pricing Theorems
Lec 24 - Risk, Return, and Social Security
Lec 25 - The Leverage Cycle and the Subprime Mortgage Crisis