Redefining Risk & Return

The Economic Red Phone Explained

Jesper Lyng Jensen, Susanne Sublett

• Publisher: Palgrave Macmillan
• Year: 2017
• Print ISBN: 9783319413686
• eBook ISBN: 9783319413693
• Topic: Business
• Subtopic: Financial Risk Management
• Index: Business

This book is the first attempt to re-define objective risk. It addresses the cost of running out of capital as a generalized cost syndrome and explains how it is possible to describe this cost in such a way as to give it practical, real-life significance for personal finances, company finances and the economy as a whole. The discussion begins by presenting an intuitive and useful definition of risk: the probability of prospective capital shortfall. From this point it establishes a risk theory and expands the work of major thinkers such as Frank Knight and John Maynard Keynes, and adds reserve capital as a new financial risk management tool, with an economic function that is different from savings. This book will be of interest to economists, politicians, and decision makers as well as to the general public.

Table of contents

• Preface
• Contents
• List of Figures
• List of Tables
• List of Formula
• 1: Introduction
• 2: How to Read a Monte Carlo Simulation Graph
• 3: Introduction to the Cost of Running Out of Capital
• 4: Risk and Uncertainty
• 5: The Cost of Running Out of Capital
• 6: Capital
• 7: Insurance
• 8: The Different Costs of Risk
• 9: Stock Taking
• 10: Macroeconomics
• 11: Self-Chosen Risk and Government Intervention
• 12: The Top Ten Most Important Realisations Regarding Structural Risk
• 13: The Cost of Structural Risk Management in Liberalism
• 14: How Is This Book to Be Understood and What Kind of Society Does It Wish to Create?
• Bibliography
• Index