Doug wrote: > They can sometimes, whatever "right" means exactly. I thought the EMH > merely claimed that market prices promptly reflect all available > information. If you believe that the markets are at least partly > driven by mob psychology, then prices often efficiently reflect > nonsense. But not always.
That's a fair way to put it. But I don't think that's what Skidelsky implied. IMO, he really distorted the story. My point above is that if you, as most textbooks do, assume that asset prices *at a given point in time* are a continuous random variable (this is separate from whether time is assumed to be discrete or continuous), then, regardless of the shape of its probability distribution, the probability that X (upper case) will take any specific value x (lower case) is zero. That's because probability is defined as a definite integral (the area under the curve of the probability density function) over some interval between minus infinity and plus infinity. The area of a straight line is zero. It's an abstract point, but I'd expect a prominent Keynesian economist to get these facts right. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
