Wednesday, November 8, 2017

Brian Romanchuk — Defining Market Efficiency Properly

The concept of market efficiency has attracted a considerable amount of debate over the decades. The issue is that the definition is problematic; efficiency is more an attribute of the investors in the market, rather than the market itself. If we turn the focus to the role of investors, most of the mysteries associated with the concept evaporate.
(Note: This article is in a preliminary state. I started thinking about how to write up the role of market efficiency in the context of breakeven inflation rates. I realised that I was unhappy with the existing definitions used, and this article represents my initial thoughts on the matter. It is quite possible that I will again revise my thinking.)
Bond Economics
Defining Market Efficiency Properly
Brian Romanchuk

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