While increasing your income is the first step toward financial success, true wealth is measured by your net worth. Net worth is the single most important metric for long-term financial health, calculated by taking the total value of your assets (what you own) and subtracting the total value of your liabilities (what you owe).
Posts tagged as “Financial Crisis”
A 125% loan typically refers to a loan, often a second mortgage or home equity loan, with a Loan-to-Value (LTV) ratio of 125%.
Financial econometrics applies statistical methods and mathematical models to financial data, offering a way to analyze market trends, test economic theories, and guide practical decision-making.
Quantitative finance—often referred to as “quant finance”—has become a cornerstone of modern markets, blending mathematics, statistics, and computer science with traditional financial theory.
The global savings glut is a macroeconomic theory that posits that the world has experienced a significant surplus of desired savings over desired investment, leading to a decline in global real interest rates and contributing to major economic imbalances.
A financial crisis is a period marked by severe disruptions in financial markets, which results in sharp declines in asset prices, failure of financial institutions, and disturbances in the flow of credit and capital.
In third generation models, crises are driven not only by fiscal or monetary policies but also by structural financial weaknesses that magnify the impact of devaluation.
The study of currency crises in economics often begins with the so-called first generation models.
Currency crises are some of the most disruptive events in global finance, capable of shaking not only domestic economies but also the broader international monetary system.
These chaotic economies emerge from the complex interactions of millions of actors, institutions, and external forces, creating patterns that resemble turbulence in nature more than the smooth lines of economic theory.
The Random Walk Theory is closely related to the Efficient Market Hypothesis (EMH), particularly its weak form.
The Butterfly Effect, originating from chaos theory, is the idea that a small, seemingly insignificant change in one part of a complex, interconnected system can lead to massive, unpredictable consequences elsewhere.