Alexander Michaelides, 03 February 2017

What happens when there are information leakages? Using Cyprus as an example, Alexander Michaelides discusses his research on downgrading announcements and market returns. This video was recorded at the Brevan Howard Centre for Financial Analysis in December 2016.

Roger Farmer, 22 January 2013

The efficient market hypothesis – in various forms – is at the heart of modern finance and macroeconomics. This column argues that market efficiency is extremely unlikely even without frictions or irrationality. Why? Because there are multiple equilibria, only one of which is Pareto efficient. For all other equilibria, the whims of market participants cause the welfare of the young to vary substantially in a way they would prefer to avoid, if given the choice. This invalidates the first welfare theorem and the idea of financial market efficiency. Central banks should thus dampen excessive market fluctuations.