The Efficient Market Hypothesis and Its Critics
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- 1 February 2003
- journal article
- Published by American Economic Association in Journal of Economic Perspectives
- Vol. 17 (1) , 59-82
- https://doi.org/10.1257/089533003321164958
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.Keywords
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