The purpose of this research is to analyze four separate, but related topics dealing with asset markets. (1) This part will involve time-series modeling of the stock and bond markets and their relations to the macro economy. The correlation between returns in the stock and bond markets will be examined to see to what to extent it is consistent with efficient markets models. (2) Markets for single family homes will be modeled and analyzed in the second part of this project. The degree to which this market may be considered efficient will be better specified. (3) Direct study of investor behavior will be undertaken using questionnaire-survey experimental methods, with the objective of learning how institutions can be modified to help serve the public better. For example, the reasons for the failure of the CPI futures markets and markets for other indexed instruments will be studied. (4) If and important event occurs in the financial markets, like the stock market crash of 1987, data will immediately be collected and analyzed regarding investor behavior during the crisis period. This project is important because it will shed important new light on the operations of stock, bond and housing markets.
