The Efficient Market Hypothesis and Its Critics

The Efficient Market Hypothesis and Its Critics abstract Revolutions often spawn counterrevolutions and the efficient market hypothesis in finance is no exception. The intellectual dominance of the efficient-market revolution has more been challenged by economists who stress psychological and behavorial elements of stock-price determination and by econometricians who argue that stock returns are, to a considerable extent, predictable. This survey examines the attacks on the efficient market hypothesis and the relationship between predictability and efficiency. I conclude that our stock markets are more efficient and less predictable than many recent academic papers would have us believe. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic Perspectives American Economic Association

The Efficient Market Hypothesis and Its Critics

Journal of Economic Perspectives, Volume 17 (1) – Mar 1, 2003

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Publisher
American Economic Association
Copyright
Copyright © 2003 by the American Economic Association
Subject
Symposia
ISSN
0895-3309
DOI
10.1257/089533003321164958
Publisher site
See Article on Publisher Site

Abstract

abstract Revolutions often spawn counterrevolutions and the efficient market hypothesis in finance is no exception. The intellectual dominance of the efficient-market revolution has more been challenged by economists who stress psychological and behavorial elements of stock-price determination and by econometricians who argue that stock returns are, to a considerable extent, predictable. This survey examines the attacks on the efficient market hypothesis and the relationship between predictability and efficiency. I conclude that our stock markets are more efficient and less predictable than many recent academic papers would have us believe.

Journal

Journal of Economic PerspectivesAmerican Economic Association

Published: Mar 1, 2003

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