A Fresh Look at the Efficient Market Hypothesis: How the Intellectual History of Finance Encouraged a Real “Fraud-on-The-Market”

Findlay, M. Chapman; Williams, Edward E.

doi:10.1080/01603477.2000.11490277

Cited by 25 publications

(15 citation statements)

References 11 publications

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“…Thompson et al (2003, especially ch. 5) and Williams (2000-2001) offer an excellent summary of the Post Keynesian criticisms of the efficient market hypothesis. Their core argument is that the distinction between uncertainty and risk has been eroded, and both are usually proxied by the variance of past data.…”

Section: Macroeconomic Effects Of Shareholder Powermentioning

confidence: 99%

Shareholder value orientation and the investment-profit puzzle

Stockhammer

2006

Journal of Post Keynesian Economics

158

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Shareholders have increased their ability to influence management decisions significantly over the past two decades. This paper proposes an extension of the Post Keynesian theory of the firm proposed by Lavoie (1992) to analyze the effects of this change in shareholder power on investment decisions. This microeconomic analysis is complemented by a Kaleckian macroeconomic model. Shareholder power is found to reduce investment and output, while increasing profits, which is consistent with the stylized facts of the neoliberal era.

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Section: Macroeconomic Effects Of Shareholder Powermentioning

confidence: 99%

Shareholder value orientation and the investment-profit puzzle

Stockhammer

2006

Journal of Post Keynesian Economics

158

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“…To sum up, the EMH is a theoretical assumption that aims at giving a theoretical meaning to the random character of stock markets observed in the 1960s and at creating a scientific framework for finance (i.e. the financial economics) (Findlay & Williams, 2001;Jovanovic, 2008). However, it is important to keep in mind that the EMH and the random character of stock markets are two different elements: the Gaussian dimension of data is neither a necessary nor a sufficient condition for having EMH.…”

Section: Iv) What Is Wrong With Emh?mentioning

confidence: 99%

On the 'Usual' Misunderstandings between Econophysics and Finance: Some Clarifications on Modelling Approaches and Efficient Market Hypothesis

2018

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In line with the recent research and debates about econophysics and financial economics, this article discusses on usual misunderstandings between the two disciplines in terms of modelling and basic hypotheses. In the literature devoted to econophysics, the methodology used by financial economists is frequently considered as a top-down approach (starting from a priori "first principles") while econophysicists rather present themselves as scholars working with a (empirical data prone) bottom-up approach. Although this dualist perspective is very common in the econophysics literature, this paper claims that the distinction is very confusing and does not permit to reveal the essence of the differences between finance and econophysics. The distinction between these two fields is mainly investigated here through the lens of the Efficient Market Hypothesis in order to show that, in substance, econophysics and financial economics tend to have a similar approach implying that the misunderstanding between these two fields at the modelling level can therefore be overstepped.JEL classification: G1, B4, B5

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“…In other words, they believed that their models of markets and their valuation are real despite evidence to the contrary. In recent times, this view has been questioned (Coleman, 2014;Findlay & Williams, 2000). Most models in finance are theories of what theorists think the world is; not what it is and often not even of what it should be (Arnott, 2005).…”

Section: Assumptionsmentioning

confidence: 99%

Gekko and black swans: Finance theory in UK undergraduate curricula

Lakshmi

2018

Critical Perspectives on Accounting

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A B S T R A C TDespite the current financial crisis, accounting and finance programmes in UK have remained popular. Finance undergraduate teaching in accounting degrees is a significant component of the degree and relies heavily on Modern Finance Theory (MFT). Some of the developments in the finance curricula are critically examined. It is argued that current finance education should become more reflective and more heterodox in approach as the current curricula is biased towards techniques based on neoclassical theory. Suggestions are given for improvement of the curricula which will allow the narrow assumptions of neoclassical theory to be widened. These involve students taking into account not only the structures and patterns of finance but also the processes which are created by human experiences as part of their interactions as well as what helps to make these processes sustainable.

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A Fresh Look at the Efficient Market Hypothesis: How the Intellectual History of Finance Encouraged a Real “Fraud-on-The-Market”

Cited by 25 publications

References 11 publications

Shareholder value orientation and the investment-profit puzzle

Shareholder value orientation and the investment-profit puzzle

On the 'Usual' Misunderstandings between Econophysics and Finance: Some Clarifications on Modelling Approaches and Efficient Market Hypothesis

Gekko and black swans: Finance theory in UK undergraduate curricula

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