The Efficient Market Hypothesis and Its Critics

Burton Malkiel
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Burton Malkiel: Princeton University

No 111, Working Papers from Princeton University, Department of Economics, Center for Economic Policy Studies.

Abstract: Revolutions often spawn counterrevolutions and the efficient market hypothesis in finance is no exception. The intellectual dominance of the efficient-market revolution has more been challenged by economists who stress psychological and behavioral elements of stock-price determination and by econometricians who argue that stock returns are, to a considerable extent, predictable. This survey examines the attacks on the efficient-market hypothesis and the relationship between predictability and efficiency. I conclude that our stock markets are more efficient and less predictable than many recent academic papers would have us believe.

JEL-codes: G14 (search for similar items in EconPapers)
Date: 2003-04
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Citations: View citations in EconPapers (480)

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