Contemporary Western financial theory

Author: Li Chong
Publisher:
Publish Date: 2005-01-01
Features: Research and discussions by domestic experts and professors, essential reading for teaching staff and students in colleges and universities, insights for officials at all levels into economic trends, and decision-making references for business management professionals. The importance of finance and financial studies lies in the fact that the modern economy has evolved into a financial economy era, where the economy has become virtualized. The foundation and core of the virtual economy are virtual capital, which, in turn, refers to financial instruments relative to productive capital. Its basic forms are securities and derivative financial instruments. Virtual capital is termed "capital" because it generates returns, and it is called "virtual" for two primary reasons: first, its value is derived from its income, making its value virtual; second, its movement is not only detached from the movement of productive capital but also from the movement of the funds it represents. The virtualization of the economy is an inevitable trend in the development of the market economy system. When virtual capital reaches a level where the value of capital becomes increasingly virtualized and its movement increasingly distant from direct production processes, the economy becomes virtualized. Under the conditions of a virtual economy, the ability to correctly understand financial phenomena and appropriately address financial issues is crucial for individuals, companies, and governments alike. This book primarily introduces contemporary Western financial theories. It aims to provide readers with a certain understanding of contemporary Western financial theories and a grasp of the financial phenomena in the real economy.