George Akerlof - Efficient Markets Hypothesis and Causes of Crisis

The video discusses the efficient market hypothesis and its potential role in financial crises, comparing it to the causes of World War One. It introduces the concept of 'animal spirits' in capitalism, focusing on confidence, snake oil, and stories as key factors in economic cycles. The speaker highlights the need for effective regulation in financial markets, using the metaphor of a playpen to illustrate the balance between freedom and oversight.

What role did Rob Johnson play in the context discussed in the text?

How does the efficient market hypothesis relate to the financial crisis according to the speaker?

How did the financial system's reliance on models contribute to the crisis?

What are the three animal spirits mentioned that played a key role in the crisis?

What does the speaker suggest about the relationship between confidence and the business cycle?

Explain the concept of 'snake oil' in the context of capitalism as described in the text.

Discuss the significance of stories in influencing market behavior as per the speaker.

What were the seven features of the financial structure that contributed to the boom and bust?

What is the 'playpen problem' as it relates to financial markets?

In what ways does the speaker suggest that regulation is necessary in financial markets?