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Parthasarathi Shome: Financial market behaviour

Models are still restricted in their capability to predict market behaviour

A familiar issue is how to gain an edge over volatile international financial markets to obviate or minimise future global financial doldrums. Should capital controls be imposed by countries or under multilateral understandings or agreements? Should there be an international financial regulatory agency to initiate action under stipulated conditions? Should financial transactions be taxed? Some countries are making forward-looking suggestions; some are resisting; others are being Humpty Dumpties. To address price volatility, price determination needs to be understood first. Traditional ...