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.
What Happened to “Efficient Markets”?
By Peter J. Boettke
This
article
appeared in
the Winter 2009/10 issue of The Independent Review.
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(13 pages)
Economic History and DevelopmentEconomyFree Market EconomicsGovernment and PoliticsLaw and LibertyPolitical Theory
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