Efficient Market Hypothesis and Rational Expectations Theory

Economics Economics Questions
1

There is an article in the New Yorker (surprise), how “Freshwater” economists are defecting towards Keynesianism:

http://www.newyorker.com/reporting/2010/01/11/100111fa_fact_cassidy

Although Freshwater/Chicago School economists utilize different methods for their analysis about the economy, we do share a common interest that the free market is the best and most liberty oriented system to have. Furthermore, the Efficient Market Hypothesis and Rational Expectations Theory have been criticized by Keynesians, although the conclusions of the two concepts advocate for a free market. IMHO, this is one of the big reasons that give the free market a bad name.

What are the Austrian answers to EMH and RET, that revoke freshwater theories, but stay true to the free market?

2

EMH

RET

3

Whoa. Those are excellent and insightful papers. I love the Hoppe quote and logic in the Shostak article.

Curious to hear how folks here have argued with Keynesians, agreeing with them against the EMH and RET, but disagreeing on the role of the free market? Also, how folks have argued with Chicago Schoolers, disagreeing with EMH and RET, yet agreeing with the role of the free market?