Capital market trading volume: an overview and some preliminary conclusions

John Grahl and Photis Lysandrou

Cambridge Journal of Economics, 2006, vol. 30, issue 6, 955-979

Abstract: This paper suggests an explanation for the heavy trading volume observed on the US capital markets, the world's largest. Heterodox economic theory puts much of this volume down to speculation. Mainstream theory tends to support this thesis, either directly or indirectly, by giving space to the idea that trading activity is for the most part exogenous to the functioning of the capital markets. The central hypothesis of this paper is that the trading volumes observed are an endogenous feature of the capital markets, because they are to a great extent determined by the needs of the institutional investors who predominate on these markets. This endogeneity of trading is posited in connection with the emergence of a new 'core--satellite' paradigm in institutional investment, a development that essentially manifests the asset-management industry's transformation from a small industry serving a few wealthy clients to a mass industry serving large sections of the population. Copyright 2006, Oxford University Press.

Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/10.1093/cje/bel014 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:cambje:v:30:y:2006:i:6:p:955-979

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Cambridge Journal of Economics is currently edited by Jacqui Lagrue

More articles in Cambridge Journal of Economics from Cambridge Political Economy Society Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().