Efficient markets’ failure hamstrung central banks: CentralBanking.com panel

The efficient markets hypothesis was one example of a failed theory used by central banks to develop policy frameworks and rules, two out of three panellists at a CentralBanking.com web seminar on Tuesday said.

The theory, first expounded to a wide audience in May 1970 by Eugene Fama, at present a professor at the University of Chicago's Booth School of Business, states that market efficiency means that prices tend to incorporate and reflect all relevant information about an asset.

Brandon

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