Dear Prof. Arize,

In a complex world and especially when it is discovered experimentally (Mallick (1993, 2007)) that Rational Stock Market Actors exhibit "bounded rationality", we are searching for linear best fits to nonlinear phenomena. For e.g. CAPM is linear but the Market Beta it's most vital natural component is nonlinear. Besides, General Equilibrium Price computation requires that solutions be linear, if 1 unit costs 10$, 100 units should cost 1,000$ at Equilibrium definitely. Hence, why make market capitalisation computations deviate from this mathematical structure of all market - the market manifold. Thanks for asking.

Soumitra K. Mallick

Thank you for the effort, my mind attributes SMC nonlinearity to govt intervention in the market, fear and sentiment and over/under reactio. For the SMC, it could be asymmetrical because at rising stock market capitalization, investor expectations are high. Whereas at declining stock market capitalization, investor expectations could be low. And real gdp response would be different at varying degrees of SMC. Does these make sense?

Sorry, I didn't understand your question fully. Of course Government Policy in general has to be nonlinear. In fact, if you care to, you can take a look at my post globalisation model of the Ministry of Finance in Stock Market countries on www.researchgate.net/Soumitra K. Mallick, Mallick (2017). In my SMC (stock market countries) you can find a market microstructure analysis and Field Theory appropriate to what you refer to as SMC (stock market capitalisation). But this analysis is based on the broad contours of "Market Organisation with Learning" Approach (Paradigm!!) developed with my PhD thesis Mallick (1993) also empirically tested Mallick et. al. (2001, 2007, 2010, 2010). I hope it answers your question to some extent.

Soumitra K. Mallick

Since you have researched this area very well, could you answer my question in a simple way without my having to read all of the papers cited now that you understand my interests.

Dear Prof. Arize,

India is now not only a G-20 country but also a leader amongst Emerging Market countries. So the neo-liberalism and neo-development model cannot analyse the Economic Policy Field without endogenising Technological Developments like Information Technology and Public Health Technology (some of it developed with Dr. Nick Hamburger and Sandipan Mallick especially in their Physical and Medical Applications), the Mathematics of which required us to develop Proof of the Millenium Prize problem no. 3 especially, and develop the Field of Mallick-Hamburger-Mallick Dbranes String Functor Algebra Calculus, other wise these technologies would not be appropriately differentiable to give rise to Differential General Equilibrium in futher developed spaces of new and advanced goods and services like advanced e-Stock Markets. So to say, that I have a simple answer to such momentous development problems would not be in keeping with scientific traditions, I hope you will appreciate. The scientists amongst our policy makers, many of whom are my friends and students, are perfectly equipped to handle existing methods so we want new analysis, new field theories, new technological methods, which I have worked on with my collaborators, including my young son, who is in college. So thank you for giving me this opportunity to write this lucid explanation of why my solutions are not simple. Thanks. Namaste. Jai Hind, Jai Upmahadesh, Jai Commonwealth. Let all live long and Happy lives.

Soumitra K Mallick

for Soumitra K. Mallick, Nick Hamburger, Sandipan Mallick

Of course! positive (herd effect) and negative feedbacks interact and non-linear behaviour emerges.