Business Insider reports an interview by George Soros where he claims ‘the Efficient Market Hypothesis (EMH) has run into bankruptcy‘.
In an interview with the Institute for New Economic Thinking (available here at youtube) George Soros argues
“prevailing paradigm of efficient market hypothesis—rational choice theory has actually run into bankruptcy, very similar to the bankruptcy of the global financial system after Lehman brothers. [We need a] fundamental rethinking of the assumptions and axioms on which economic theory has been based. because economics has been trying to come up with universally valid laws similar to Newtonian physics and that i think is an impossibility you need a new approach with different methods and also different criteria of what’s acceptable.”
This is what an increasing number of economists agree, including obviously behavioralists like me. This view is becoming mainstream in the Universities of US and Europe… but no worries if you are a Spaniard Fama’s supporter: all institutions in Spain (BdE and, above all, CNMV) and private universities and business centers will support market rationality for many years to come. It is easy: they don’t care about honestly pursuing the Truth -with capital letters. They only care about maintaining their dominant position. And EMH is a fundamental cornerstone for such purpose.
Related: ‘El sofisma de los mercados eficientes‘.