Professor Fama’s ‘Nobel’ Prize toxic theory explained

EMH, along with RBC theory and Rational Expectations are in the unholy trinity of zombie economic ideas kept alive and well thanks to the Swedish central bank awarding Fama the Prize in Economic Sciences in honour of Alfred Nobel.

Yanis Varoufakis

Readers have requested a summary of the Efficient Market Hypothesis, which is in the news again as a result of the ‘Nobel’ Prize award to Professor Eugene Fama – see this instant reaction on the matter). In what follows the reader can peruse very brief presentations of the triad of toxic theories that undermined macroeconomic logic and helped legitimise the practices that contributed no end to the Crash of 2008. They are: the Rational Expectations Hypothesis, Eugene Fama’s Efficient Market Hypothesis and the so-called Real Business Cycle Theory

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