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Volume 14  Number 3  •  Winter 2010
All Issues:  

What Happened to “Efficient Markets”?
By Peter J. Boettke
This article appeared in the Winter 2010 issue of The Independent Review

The financial crisis invalidated a naïve notion of “efficient markets,” but the most sophisticated version is still viable. Whereas the invalidated version holds that markets never err and always adjust instantaneously, the sophisticated version, associated with the ideas of Adam Smith and F. A. Hayek, holds that markets mobilize individuals to realize gains from trade and to innovate and thereby produce generalized prosperity.

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