Emotion is not a malfunction of the economy but its essence. Why do failed strategies get repeated, and why do we jump in when we are at the peak of the bubble?
"The paradox of the economy, swayed by emotion" has been published. This book analyzes how human emotions and behaviors stir the market from the perspective of behavioral economics, rather than viewing the economy as a domain of reason.
Traditional economics does not treat irrational elements as variables. However, this book highlights emotions, cognitive biases, and psychological errors, discussed in behavioral economics, as core elements that shake the essence of the economy and define humanity.
It particularly illustrates, based on numerous real-world cases in the real economy and financial markets, how irrational elements affect decision-making.
The phenomenon of averaging down during Samsung Electronics' stock price decline, the investment sentiment that chases short-term profits over startup visions, the resilience to Japan's economy plunging due to yen depreciation, and the controversy over the abolition of short selling have been reinterpreted through the framework of behavioral economics. Beyond simple conceptual explanations, it reveals the significance in a way that directly impacts our lives and assets.
The book also addresses the K-economy. Korea's economy faces the triple crisis of high exchange rates, high prices, and high interest rates, along with structural low growth issues. The author warns that it is confronted with a "perfect storm" as the risks of semiconductor and traditional manufacturing competitiveness weakening and the depletion of the national pension converge.
Currently, Korea's economy faces the Korea discount and the structural limitations of capital markets. Countless individual investors enter the market believing in their dreams. However, what awaits them are deceptive disclosures, zombie companies, and governance tricks.
The author does not merely criticize this reality but also compares and analyzes alternative exchanges and exit systems for marginal companies in Japan, the United States, Europe, and presents directions for a healthy capital market and Korea's economy.