Abstract
It is argued that Mandelbrot's stable Lévy-Pareto distributions were not accepted into the emerging field of financial economics due to their incompatibility with the analytical techniques and properties of equilibrium economics, and to the absence -both in physics and in economics- of analytical solutions to the infinite variance associated with those distributions. Whilst physicists made stable Lévy distributions plausible, creating Econophysics in the meantime, economists just forgot about them, suggesting their strong bias towards desirable properties and against established facts.
Publisher
Universidad Nacional de Colombia
Subject
General Economics, Econometrics and Finance,Social Sciences (miscellaneous),Arts and Humanities (miscellaneous)
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