Thursday, September 18, 2008

market theory summary

Why mkt is not efficient? Mkts are not efficient, they usually get locked into feedback mechnism and lead to booms and busts. Otherwise, why economy needs central banks in the first place? What is the origin of the crisis? The origin of the crisis is the pre-emptive asymmetric monetary policy to blame. Central bankers subsbscribe to one economic philosophy, which believes market is efficient, when economy is expanding and another when economy is contracting.

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