In Search of the Origins of Financial Fluctuations: The Inelastic Markets Hypothesis
In Search of the Origins of Financial Fluctuations: The Inelastic Markets Hypothesis ArXiv ID: ssrn-3886763 “View on arXiv” Authors: Unknown Abstract Our framework allows us to give a dynamic economic structure to old and recent datasets comprising holdings and flows in various segments of the market. The mys Keywords: Asset Pricing, Market Dynamics, Holding Data Analysis, Flow Analysis, Financial Markets, Equity Complexity vs Empirical Score Math Complexity: 8.5/10 Empirical Rigor: 7.0/10 Quadrant: Holy Grail Why: The paper presents a complex stochastic framework using integrals and non-linear dynamics to model price impact and liquidity, indicating high mathematical density. Empirically, it leverages extensive granular datasets on holdings and flows across various market segments, suggesting strong data backing and backtest potential. flowchart TD A["Research Goal:<br>Determine the origins of financial fluctuations<br>via the Inelastic Markets Hypothesis"] --> B["Methodology:<br>Theoretical framework integrating<br>asset pricing with holdings/flows"] B --> C["Data Inputs:<br>Portfolio holdings & trading flows<br>in various market segments"] C --> D["Computational Process:<br>Dynamic economic structure modeling<br>of supply/demand inelasticity"] D --> E["Key Findings:<br>Price volatility stems from inelastic supply/demand<br>Portfolio adjustments drive financial fluctuations"] E --> F["Outcomes:<br>Unified framework for analyzing<br>old and recent market datasets"]