During his college years in Harvard, Fischer never needed to follow Lintner’s instructions in order to comprehend the CAPM.
Thanks to what he learned on CAPM from Treynor, Fischer considered the economy as a whole. The problem faced by the individual investors and the individual firms came from, according to Fischer, the idea of equilibrium. On the contrary, the other economists thought that equilibrium was the solution of these problems.
Few years later, in 1969, Fischer published his first economic paper on monetary theory, the Financial Note No. 7. Meanwhile the summer of 1969, when the Woodstock music festival and the peak of the Vietnam War occurred, Fischer, far away from the protests, “was busy spinning a countercultural vision of his own”. He was focused on Treynor and the idea of equilibrium.
B for Jamon, for multiple grammatical problems.
ReplyDeleteWhy was it a good thing that Black never had to learn from Lintner? The reason is that Lintner never believed his own CAPM results; they were always a means to the end of disproving Modigliani and Miller.
It's interesting that Black has the math of his options' pricing model worked out by the summer of 1969, even though it is was several years before it was published.
FWIW: As a macroeconomist, I've struggled through some of Black's writings about macro, and I can't make heads or tails of it.
BTW: the Ross' mentioned in this section is the same one that wrote this book. He may win a Nobel Prize for his work on, among other things, the APT model.
Extra Credit for the first person to reply back with an explanation of what "grey eminence" means in the context it is used here.