The Efficient-market Hypothesis (EMH) and Financial Crisis

Gianluca Oricchio

Chapter 7 in Corporate Management in a Knowledge-Based Economy, 2012, pp 155-168 from Palgrave Macmillan

Abstract: Abstract The severity and amplitude of the recent global crisis provide convincing evidence that there is something fundamentally wrong with the prevailing theory on how financial markets work and with the approach to market regulation that has accompanied it. Understanding what has happened and what should be done to avoid such a catastrophic crisis in the future will require a new way of thinking about how markets work. The key point analysed in this chapter is the efficient-market hypothesis (EMH) and its accounting corollary, the mark-to-market principle.

Keywords: Cash Flow; Financial Crisis; Credit Risk; Share Price; Corporate Management (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-35545-3_7

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DOI: 10.1057/9780230355453_7

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