Volatility-Induced Financial Growth
FINRISK Working Paper No. 131
23 Pages Posted: 14 Jun 2007
Date Written: October 18, 2006
We show that the volatility of a price process, which is usually regarded as an impediment to financial growth, can serve as an endogenous factor in its acceleration.
Keywords: Volatility, constant proportions strategies, financial markets, investment, exponential growth, transaction costs
JEL Classification: G11
Suggested Citation: Suggested Citation