Markus Brunnermeier - Efficient Market Hypothesis, Bubbles and Liquidity

The video provides an overview of the efficient market hypothesis, emphasizing the importance of rational expectations. It discusses the different forms of market efficiency and highlights the logical inconsistencies in the strong form. The video explores market inefficiencies, particularly focusing on bubbles and credit bubbles, and their implications for systemic risk. It concludes with a discussion on regulatory measures needed to address these market failures, emphasizing the need for countercyclical regulation and systemic risk measures.

What does the text suggest about the predictability of price changes in efficient markets?

How does the concept of 'greater fool theory' relate to market bubbles?

What are the challenges in measuring systemic risk as opposed to institutional risk?

In what ways does the text propose to improve regulatory frameworks in light of market inefficiencies?