Takao Kobayashi (Faculty of Economics, University of Tokyo)
Abstract
In this article I provide the definition of market efficiency in its broadest spectrum. Instead of surveying the vast literature on where the actual market conforms to the prediction of the finance theory and where it does not, I explore the conceptual issues surrounding the idea of efficient markets and give corrections to some common misunderstanding of the efficient market hypothesis. I also clarify how the notion of market efficiency is related to the standard model of asset pricing and point out the weakness of the current theory in explaining the operation of actual markets.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE J-Series with number
CIRJE-J-167.