Read: The Myth of the Rational Market
Slowly, very slowly I read through the backlog of books on my to-read-shelf. Justin Fox's The Myth of the Rational Market must have been on my shelf for about three years. I should have read it earlier. It's good.
The Myth of the Rational Market is an entertaining history of academic and applied finance. Fox links the events in the financial sector to financial innovations to changing schools of thought and to persons. The result is a vivid tour through the ups and downs of the stock market and an introduction to the various characters that shaped and challenged the scholar's view on the financial markets. I honestly enjoyed reading the book, seeing all those well known names of (dare I say) colleagues and their research.
Though there is, of course, a chapter on experimental economics and behavioral finance it is pleasantly little pop-sciency. Given the hype around behavioral economics during the past years this is anything but granted…
Not being from or in the US I also found the remarks about the distinction between economics departments and business schools – which encourages differences in approaches, research questions and rigor – interesting. Yes, there is a similar divide in content and academic ‘style’ in Germany, yet, we are most often part of the same academic unit and not separated by the design of the institution.