Andrew Smithers argues that faster productivity does not depend, as many suggest, on technology; it also relies on investment. Current growth theory is based on a faulty model which has induced pessimism about our ability to encourage more growth. Productivity and the Bonus Culture sets out a revised model which demonstrates that weakness in productivity is the result of the bonus culture.

In this timely and thought provoking sequel to the hugely successful ‘Valuing Wall Street’ Andrew Smithers puts forward a coherent and testable economic theory in order to influence investors,
pension consultants and central bankers policy decisions so that they may prevent history repeating itself. Backed by theory and substantial evidence Andrew shows that assets can be valued, as financial markets are neither perfectly efficient nor absurd casinos.

The current consensus model for the economy is invalid, being based on aprioristic assumptions which are shown to be invalid when tested against the data.

It assumes that managements and shareholders seek to maximise the present value of their companies’ net worth. In fact they respond to the stock market’s assessment of their value.

When Valuing Wall Street was published in March 2000, the following statement was set out on the cover of the book.

The U.S. stock market is massively overvalued. As a result, the Dow could easily plummet to 4,000 – or lower – losing more than 50% of its value wiping out nest eggs for millions of investors. So argue Andrew Smithers and Stephen Wright in Valuing Wall Street: Protecting Wealth in Turbulent Markets.

Subsequent events dramatically confirmed the strength and validity of the arguments. Valuing Wall Street enables investors to understand how stock markets can be valued and how to benefit from this knowledge.