Ethical Asset Valuation and the Good Society

For all of their focus on asset prices, financial economists rarely ask if assets are priced ethically¿that is, if their prices are compatible with the public good. Yet in a world facing major, possibly catastrophic problems¿global warming, for instance, and growing inequality¿it is now more important than ever that we allocate capital to projects that will benefit society as a whole, not just today but far into the future. In this book, Christian Gollier develops a powerful method for transforming our societal goals of collective prosperity into the cornerstone of our financial decision making. Ethical Asset Valuation and the Good Society starts by stating transparent moral principles and, from these, derives simple rules that can be used to evaluate saving and investment decisions in terms of the public good. Rather than trying to explain observed asset prices, Gollier derives what these prices ought to be in order to direct capital toward socially desirable investments.