Chapter 8: Implications for Everyday Systems

Section 8: Financial Systems

Properties of markets

Issues of how averaging is done and how irrelevant trends are removed turn out to make unequivocal tests of almost any quantitative hypothesis about prices essentially impossible. The rational expectations theory that prices reflect discounted future earnings has for example been subjected to many empirical tests, but has never been convincingly proved or disproved.

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From Stephen Wolfram: A New Kind of Science [citation]