NAME THAT ECONOMIST!

A random quote game from Econlib


Quiz yourself! Who wrote this quote?

In a market economy, on the other hand, we have in the stock exchange a center for the consistent daily evaluation of all the more important capital combinations. This, to be sure, is not objective measurement. The measurement of capital is forever beyond our reach. But it is something more than mere subjective evaluation. Stock exchange prices of capital assets reflect a balance of expectations. There are two classes of traders in the market, and in an asset market the fundamentum divisionis is the optimism or pessimism of expectations. Hence, market prices of securities (and the capital assets they represent) have social significance, we might say a "social objectivity," which transcends the mere subjective expectations of buyers and sellers on which they are based. The objects of valuation are not individual capital goods but fractions of capital combinations that are the substrate of multiperiod plans. It is expectations about the success of multiperiod plans that bulls and bears are continuously expressing.






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