Posted: Nov 18, 2013 1:46 am
GT2211 wrote:Stiglitz work on information asymmetry is a major part of financial economics and RePEC's rankings based on influence/importance has him 4th.
Who is implementing his ideas in practice? Certainly not his former employer.
GT2211 wrote:Someone else here may be more familiar with this than I am, but based on the interview below it does not seem that Fama believes that the EMH implies a bell curve type distribution.
Then how does he explain events well over four standard deviations, several times more than that in fact, occurring repeatedly on financial markets in the past decades?
To complicate things, "the EMH" says nothing about how long it takes for the market to process information.
That just allows the opportunity for endless ad hoc hypotheses to save the EMH. But there's an even bigger problem with the EMH. A lot bigger:
Markets are efficient if and only if P = NP