Evening Must-Read: Robert Shiller: “[Eugene Fama] Is a Careful Researcher…

Robert Shiller: “[Eugene Fama] is a careful researcher, an inspired researcher….

…I don’t know if Fama ever states his theory really clearly, if he did it might sound a little odd…. I shouldn’t try to psychoanalyse Eugene Fama but I know that he is committed… to a libertarian philosophy, teaching at the University of Chicago where Milton Friedman once lived. It must affect your thinking somehow that they really believe in markets. I think that maybe he has a cognitive dissonance. His research shows that markets are not efficient. So what do you do if you are living in the University of Chicago? It’s like being a Catholic priest and then discovering that God doesn’t exist or something, you can’t deal with that, you’ve got to somehow rationalise it…. Some people who seem crazy turn out to be smart after all. Apparently that is what Fama thinks. I think they are just crazy,” Shiller said, conceding his remarks “may be insulting” to his fellow laureate…. [He has a] fundamentally different view of the world. That’s the world we live in, when it comes to economics people have emotions, it’s not like chemistry or physics…