Financial economics, and the calculations of time and uncertainty derived from it, are playing an increasingly important role in non-finance areas, such as monetary and environmental economics. In this 2001 book, Professors Le Roy and Werner supply a rigorous yet accessible graduate-level introduction to this subfield of microeconomic theory and general equilibrium theory. Since students often find the link between financial economics and equilibrium theory hard to grasp, they devote less attention to purely financial topics such as calculation of derivatives, (...) while aiming to make the connection explicit and clear in each stage of the exposition. Emphasis is placed on detailed study of two-date models, because almost all of the key ideas in financial economics can be developed in the two-date setting. In addition to rigorous analysis, substantial sections of discussion and examples are included to make the ideas readily understandable. (shrink)

In “The Will to Believe,” William James affirms that we have some control over what we believe and asks how this control should be exercised. He rejects the evidentialists’ view that we ought to believe only when intellectual grounds make it quite sure that the belief is true. For him, “options” are choices among contrary beliefs. Some options are “living,” “forced,” and “momentous.” James’ thesis concerns belief-options that have these three features and where proof as to the truth is unavailable. (...) He holds that in such cases we have a right to believe, provided believing has better consequences than not believing would. James is correct that sometimes it is permissible to believe without adequate grounds. His view is misleading, though, when he leaves the impression that this is so only where the option is living, forced, momentous, and not settleable by evidence. The right to believe has broader scope than this. Moreover, James’ right to believe presupposes a view of truth at odds with his later pragmatism. (shrink)

:The most basic question one can ask of a model is ‘What is the effect on variable y2 of variable y1?’ Causation is ‘implementation neutral’ when all interventions on external variables that lead to a given change in y1 have the same effect on y2, so that the effect of y1 on y2 is defined unambiguously. Familiar ideas of causal analysis do not apply when causation is implementation neutral. For example, a cause variable cannot be linked to an effect variable (...) by both a direct path and a distinct indirect path. Discussion of empirical aspects of implementation neutrality leads to further unexpected results, such as that if one variable causes another the coefficient representing that causal link is always identified. (shrink)

This chapter contains sections titled: The Catholic Fathers facing grammatical and logical precision The Fathers and the challenges of Aristotelian philosophy Varying interpretations of the same text.

William of Ockham discussed the fallacy of amphiboly twice in his writings. The first treatment was in his Expositio super libros Elenchorum, where he simply presents Aristotle’s treatment, updates it with some Latin examples, and tells us it is not too important, since we do not often run into cases of ambiguity of thiskind. Later, in his Summa logicae, however, he extends his treatment appreciably. He here includes under ambiguous statements philosophical and theological sentences which are improperly stated. Led by (...) Aristotle, Augustine and Anselm, Ockham finds that in their writings they give us instances of improper statements which need to be restated properly before they can be evaluated as true or false. These leads provide for Ockham a key to unlocking the teaching treasures of the Ancients. (shrink)