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Primary and Secondary Markets

26 Pages Posted: 26 Aug 2011 Last revised: 20 Mar 2015

Egmont Kakarot-Handtke

University of Stuttgart - Institute of Economics and Law

Multiple version iconThere are 2 versions of this paper

Date Written: August 25, 2011

Abstract

This paper swaps the standard behavioral axioms for structural axioms and applies the latter to the analysis of the emergence of secondary markets from the flow part of the economy. Real and nominal residuals at first give rise to the accumulation of the stock of money and the stock of commodities. These stocks constitute the demand and supply side of secondary markets. The pricing in these markets is different from the pricing in the primary markets. Realized appreciation in the secondary markets is different from income or profit. To treat primary and secondary markets alike is therefore a category mistake.

Keywords: new framework of concepts, structure-centric, axiom set, residuals, real and monetary stocks, money, credit, financial saving, nonfinancial saving, net worth, financial profit, nonfinancial profit, retained profit, appreciation, wealth

JEL Classification: D40, D50

Suggested Citation

Kakarot-Handtke, Egmont, Primary and Secondary Markets (August 25, 2011). Available at SSRN: https://ssrn.com/abstract=1917012 or http://dx.doi.org/10.2139/ssrn.1917012

Egmont Kakarot-Handtke (Contact Author)

University of Stuttgart - Institute of Economics and Law ( email )

Keplerstrasse 17
Stuttgart
Germany

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