Prior to viewing the video below, I suggest you read these three posts (in this order):

The kinda-eventually-sorta-mostly-almost Efficient Market Theory (November 20th, 2004)

• Random Walk and Outperforming Fund Managers (July 19th, 2006)

• How Shiller helped Fama win the Nobel (October 26th, 2013)

In 2008, Eugene Fama made a video for the American Finance Association on the history of the efficient markets hypothesis.

Hat tip The Grumpy Economist

Category: Really, really bad calls, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “A Brief History of the Efficient Market Hypothesis”

  1. DeDude says:

    I can understand that people as a first approximation to the truth and in order to get stated on a model of the economy would say people act according to their own interest. You have to begin somewhere and at least as an idea it makes sense. But how on earth someone could move from taking it as a first approximation of the truth to be a universal stand alone rule, is hard to understand. Just as intuitive as the idea of “people trying to act in their own best interest” is the idea that “people may not have the knowledge to actually act in their own best interest”.

  2. ironman says:

    Let’s toss this little bomb out there too – what both Fama and Shiller say can’t happen, but does….

  3. patfla says:

    It’s not a one-to-one mapping but somehow

    A Brief History of the Efficient Market Hypothesis

    puts me in mind of

    A New Refutation of Time

    which is the title of a Jorge Luis Borges story.

  4. BusSchDean says:

    Great article on how Shiller helped Fama win Nobel Prize. Funny how we can lose our way following a good idea.

  5. rd says:

    EMH, Supply-Side Economics, and deregulation due to rational actors not blowing up their own system are three of the most costly reifications that have occurred in the past 50 years: