In November he said that the robust fundamentals of the economy would eventually "shine through," attracting investors and pushing the dollar back up.
For the Czechs, it's all about the economy's robust fundamentals.
Hackett considers current conditions to be unsustainable in the near-term and cautions against assuming that surging prices mean robust fundamentals: "Have we not learned anything over the last year that hot money breeds distorted price discovery?" Thomson Reuters contributed to this article.
Theorem 1, Proposition 1, and Theorem 4 play a fundamental role in our specification of the robust fundamental value.
The following results are of independent interest, but they also play an important role for studying financial bubbles under model uncertainty, as explained in "Robust fundamental value" section.
In this setting, we investigate a dynamic version of robust superreplication, which we use to introduce the notions of bubble and robust fundamental value in a way consistent with the existing literature in the classical case ({mathcal {P}}={{mathbb {P}}}).
In "Bubbles under uncertainty" section, after reviewing the existing literature, we discuss and study our concept of robust fundamental value, bubble under uncertainty, and robust no dominance, illustrating our results through concrete examples.
There is now a bubble in the market at a stopping time τ if there exists a scenario (a probability measure (bar {{mathbb {Q}}}in {mathcal {P}})) such that the robust fundamental value is smaller than the market value with positive probability and all probabilities that coincide with (bar {{mathbb {Q}}}) on ({mathcal {F}}_{tau }) agree on this view.
This can be only achieved if aggregation of the conditional expectations is possible, which is guaranteed by the results of Theorem 1. Furthermore, Theorem 1 ensures that the resulting robust fundamental value is sub-linear, which extends the classical concept of linear pricing operator.
To reflect the impossibility for the investor to consume the final payoff of S in the case, we generalize the definition of robust fundamental value established in (19) by setting S^{ast}_{t}=left({underset{mathbb{Q}^{prime}in mathcal{P} t,mathbb{Q})}{mathrm{ess,sup}}} E_{mathbb{Q}^{prime}}[S_{tau}{mathbf{1}}_{{{tau
A string of rate cuts by the Australian central bank over the past 18 months has failed to weaken the currency, he added, because Australia's robust economic fundamentals, low public-sector debt and strong investment returns, relative to those in other developed economies, continue to make it an attractive destination for overseas cash.
