Financial models usually proceed “as if” aggregation across heterogeneous financial intermediaries suppresses little information. The presumption is that the relevant set of relative yields remains essentially constant over time across intermediaries. Drawing on the fact that objective functions differ across intermediaries, we present theoretical evidence and data that question standard practice and suggest proceeding “as if” such differences exist and matter.
|Original language||English (US)|
|Number of pages||10|
|State||Published - Nov 1987|
All Science Journal Classification (ASJC) codes
- Economics and Econometrics