Tuesday, August 11, 2009

The Myth of the Rational Market

I'm about two-thirds of the way through Justin Fox's book, The Myth of the Rational Market. I've read it very quickly, since it's an entertaining century-long history of the progression of ideas that underpin modern financial market theory and, related, economic theory. For the layreader, I can see this potentially being a difficult read; not because it's overly technical or dense on theory, but even the snippets of theory (which are well-exposited if you've had some exposure to them) I'd bet, unfortunately, many readers may find a put-off.

But I think many more economists, in particular academic economists --- I'll focus on macroeconomists, since that's the small sphere about which I think I know something --- should be versed in the kind of history of thought that Fox narrates in this book. To provide some perspective on the extremely technical things we usually do in our "scientific" work. The kind of historical and social contextualization of the development of economic and financial theory this book aims for should be part of a good economics education, undergraduate and beyond.