NOISE
A constant flow of data that provides no information, or obstructs the information. Noise Amplifier is a process where the government, the market, businesses, or individuals mistakenly take small fluctuations of data and turns them into harmful volatility. Noise can refer to any random fluctuations of data that hinder the perception of a signal/information.
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What is the impact of noise on the financial markets and the economy?
Does noise dissipate with no harm? The Common Perception
OR
Does noise manifest itself into harmful volatility? The Noise Factor

The Common Perception

More data equal more information

The Noise Factor

More data equal more noise

The Common Perception

Precision leads to accuracy

The Noise Factor

You can't be more precise than the noise. Precision in pricing leads to inaccuracy in valuations

The Common Perception

The more we trade the more efficient the market is

The Noise Factor

The more we trade the more we react to noise

The Common Perception

Derivatives are tools that divide risk among market participants efficiently

The Noise Factor

Derivatives are noise amplifiers turning small fluctuations into big gains and losses

The Common Perception

Counter-reaction is a good correction mechanism

The Noise Factor

Counter-reaction leads to oscillations

The Common Perception

Central banks should steer economic activity by adjusting the supply of money

The Noise Factor

Central banks should steer economic activity only in extreme cases. Their goal is to prevent financial bubbles by controlling the credit supply

The Common Perception

Central banks create economic stability

The Noise Factor

Central banks amplify the noise

ABOUT THE AUTHOR
Yishai Ashlag holds a Ph.D. in economics from Bar Ilan University. Upon graduation, he was a visiting scholar at the Wharton School of Business. Yishai is an entrepreneur and an expert in the Theory of Constraints. Currently, he is a senior partner at Goldratt Consulting. THE NOISE FACTOR is his fourth book.

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