The Economics of Financial Markets was written by Hendrik S.Houthakker.

The book puts economics to work on the daily problems faced by investors, traders, speculators and brokers as they wrestle with increasingly complex financial markets. Drawing on data from the financial behavior of households, corporations, and governments, through to the prices of individual securities, the authors show how accessible but rigorous economics can help the players make sense of the hour-by-hour reality of the way financial markets move. They contend that many of the twists and turns are rational and predictable. The authors show how inefficiencies can become unique profit opportunities. Bringing together information on the daily workings of financial markets with the concepts and tools of economics has provided a valuable resource for practitioners and students alike.