Bloomberg had the story about how "The global financial crisis
has blown a hole in the 'efficient markets' theory on which modern economics
and modern finance have been based, said Richard Thaler, a professor of economics and behavioral science at the University of Chicago ... he said the theory assumes that everyone in the economy behaves rationally, which is like leaving friction out of account when doing physics. It consists of two assertions: that asset prices are right, in the sense that they fully reflect available information and thus provide accurate signals for allocation resources; and that market prices are impossible to predict, Thaler said."
Oddly enough, this comes at the same time a doofus named Robert Lucas at the University of Chicago whines in The Economist magazine that in a previous issue the magazine was.. (more)
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