Proceedings of the International Workshop on Navigating the Digital Business Frontier for Sustainable Financial Innovation (ICDEBA 2024)

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In-Depth Understanding of the Fisher Model in the Financial Market

Authors
Yichen Gu1, *
1School of Economics and Management, Xidian University, Xian, 710000, China
*Corresponding author. Email: 23061300080@stu.xidian.edu.cn
Corresponding Author
Yichen Gu
Available Online 24 February 2025.
DOI
10.2991/978-94-6463-652-9_32How to use a DOI?
Keywords
Fisher Model; Limitation; Application; Fisher Effect
Abstract

In the early 20th century, economics and finance transitioned from qualitative assessment to mathematical modelling, as Irving Fisher’s 1930 model demonstrated. This model provided a crucial framework for comprehending consumption, savings, and investment behaviour amid uncertainty. With the increasing complexity of financial markets, the Fisher model became an essential tool for investors and analysts in asset pricing, risk management, and optimal decision-making. Furthermore, Fisher’s separation theorem was pivotal in guiding corporate investment decisions within corporate finance. Policymakers also found value in the model’s capacity to evaluate the effects of economic policies on consumption and investment, thereby contributing to the advancement of modern economic and financial theories. The research first set up a mathematical model in the perfect competition capital market to explore the Fisher model in the financial market. In addition, the research finally launched an in-depth discussion of the Fisher model and expanded the limitations of its application. Finally, the Central Insights and Potential limitations of the Fisher Model are summarised.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Workshop on Navigating the Digital Business Frontier for Sustainable Financial Innovation (ICDEBA 2024)
Series
Advances in Economics, Business and Management Research
Publication Date
24 February 2025
ISBN
978-94-6463-652-9
ISSN
2352-5428
DOI
10.2991/978-94-6463-652-9_32How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Yichen Gu
PY  - 2025
DA  - 2025/02/24
TI  - In-Depth Understanding of the Fisher Model in the Financial Market
BT  - Proceedings of the International Workshop on Navigating the Digital Business Frontier for Sustainable Financial Innovation (ICDEBA 2024)
PB  - Atlantis Press
SP  - 317
EP  - 328
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-652-9_32
DO  - 10.2991/978-94-6463-652-9_32
ID  - Gu2025
ER  -