We show that in an incomplete market with a locally risky discount factor (one with a positive instantaneous volatility), the risk-adjusted drift on any traded asset is equal to the drift on the minimum instantaneous variance portfolio, which we call the latent interest rate of the economy. We...

This paper considers an economy in which a not-for-profit government seeks to minimize the cost to taxpayers of maintaining a constitutionally mandated free trading market economy while letting firms maximize market values. By free trading, I mean that the government does not (a) force merger...

The economy is modeled as a set of leveraged firms (including households) with potentially superior information who choose their assets to maximize their net-worth, while an efficient, not-for-profit government enacts and administers constitutional rules for free trading of goods, services and...

This paper shows that the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Security and Exchange Commission have embraced an unconstitutional system of money and finance. This system is designed to deprive the principals (citizens) of their hard-earned wealth. It is...