This book discusses the interplay of stochastics (applied probability theory) and numerical analysis in the field of quantitative finance. The stochastic models, numerical valuation techniques, computational aspects, financial products, and risk management applications presented will enable readers to progress in the challenging field of computational finance.When the behavior of financial market participants changes, the corresponding stochastic mathematical models describing the prices may also change. Financial regulation may play a role in such changes too. The book thus presents several models for stock prices, interest rates as well as foreign-exchange rates, with increasing complexity across the chapters. As is said in the industry, 'do not fall in love with your favorite model.' The book covers equity models before moving to short-rate and other interest rate models. We cast these models for interest rate into the Heath-Jarrow-Morton framework, show relations between the different models, and explain a few interest rate products and their pricing.The chapters are accompanied by exercises. Students can access solutions to selected exercises, while complete solutions are made available to instructors. The MATLAB and Python computer codes used for most tables and figures in the book are made available for both print and e-book users. This book will be useful for people working in the financial industry, for those aiming to work there one day, and for anyone interested in quantitative finance. The topics that are discussed are relevant for MSc and PhD students, academic researchers, and for quants in the financial industry.

The present study has been accepted as a doctoral thesis by the Depart ment of Economics of the Johann Wolfgang Goethe-University in Frankfurt am Main. It grew out from my five year long participation in two research projects, "Econometric analysis of transaction intensity and volatility on fi nancial markets", and "Microstructure on financial markets", that were both conducted by the chair of Statistics and Econometrics (Empirical Economic Research) at the Department of Economics and Business Administration, Jo hann Wolfgang Goethe-University in Frankfurt am Main and financed by the state of Hessen. During this time I have benefitted from many people. First and foremost I would like to thank my thesis supervisor, Prof. Dr. Reinhard Hujer, for initiating and supporting my studies with great encouragement. I am also very grateful to Prof. Dr. Christian Schlag for acting as the second thesis supervisor. Furthermore, I wish to thank Prof. Dr. Joachim Grammig who introduced me to the topics covered in this study in the first place and helped me to sharpen my views on econometrics and financial market microstructure theory through many discussions and also through his willingness to work with me on several related studies.

Increasing customer needs, the globalization of markets and the evolution of e-commerce add to the complexity of logistic processes. In today's business, it is well understood that an effective management of logistic processes is impossible without the use of computer-based tools and quantitative methods. This book presents in a systematic way quantitative approaches to distribution logistics and supply chain management. The main orientation of the book is towards practical problem solving, and numerous case studies and practical applications are presented. The topics covered include: supply chain management, revers logistics, e-commerce, facility location and network planning, vehicle routing, warehousing, inventory control.

This edition provides a mix of research perspectives to examine the economic and non-economic outcomes of global developments in financial regulation, monetary and fiscal measures, or sustainable development, with a tailored focus on specifics in emerging and transitioning countries. The volume combines a mix of approaches to investigate relevant newly emerged topics (e.g., economics of emissions, corporate social responsibility reporting) as well as traditional issues requiring new approaches (e.g., exchange rate mechanisms, investment strategies, the impact of corporate reporting on economic fundamentals). Such a comprehensive view of contemporary economic phenomena makes the volume attractive not only to academia, but also to regulators and policymakers, when deliberating on the potential outcomes of competing regulatory mechanisms.

The economy is examined by the authors as a complex interactive system. The emphasis is on the direct interaction between agents rather than on the indirect and autonomous interaction through the market mechanism. Contributions from economists and physicists emphasise the consequences for aggregate behaviour of the interaction between agents with limited rationality. Models of financial markets which exhibit many of the stylised facts of empirical markets such as bubbles, herd behaviour and long memory are presented. This includes contributions on bargaining, buyer-seller relations, the evolution of economic networks and several aspects of macro-economic behaviour. This book will be of interest to all those interested in the foundations of collective social and economic behaviour and in particular, to those concerned with the dynamics of market behaviour and recent applications of physics to economics.

Over more than two centuries the developmentofeconomic theory has created a wide array of different concepts, theories, and insights. My recent books, Capital and Knowledge (Zhang, 1999) and A TheoryofInternational Trade (Zhang, 2000) show how separate economic theories such as the Marxian economics, the Keynesian economics, the general equilibrium theory, the neoclassical growth theory, and the neoclassical trade theory can be examined within a single theoretical framework. This book isto further expand the frameworkproposed in the previous studies. This book is a part of my economic theory with endogenous population, capital, knowledge, preferences, sexual division of labor and consumption, institutions, economic structures and exchange values over time and space (Zhang, 1996a). As an extension of the Capital and Knowledge, which is focused on the dynamics of national economies, this book is to construct a theory of urban economies. We are concerned with dynamic relations between division of labor, division ofconsumption and determination of prices structure over space. We examine dynamic interdependence between capital accumulation, knowledge creation and utilization, economicgrowth, price structuresand urban pattern formation under free competition. The theory is constructed on the basisofa few concepts within a compact framework. The comparative advantage of our theory is that in providing rich insights into complex of spatial economies it uses only a few concepts and simplified functional forms and accepts a few assumptions about behavior of consumers, producers, and institutionalstructures.