Kai Ryssdal's final note.
Not so much news as a commentary on the state of the economic profession. The Nobel Prize in economics comes out Monday morning. I obviously have no idea who's going to win, but the markets think they do. The betting line at Ladbrokes, in London, has Eugene Fama of the University of Chicago as a 2-to-1 favorite.
That's all well and good except for this: Fama's best known for something called the Efficient Markets Theory. That the markets are, in essence, always right. I dunno, I'd say that's a tough sell after the year and a half we've just had. More to come on Monday.
Friday, October 9, 2009
Nobel Prize for Efficient Markets Hypothesis?
One of the core ideas driving the derivation of the Black-Scholes model is the efficient markets hypothesis. Exactly what this comes to is hopefully something I'll post on next week. But for now I'll pass on this from NPR's Marketplace: