Quotation of the Day…

… from pages 36-37 of John H. Cochrane, "How Did Paul Krugman Get It So Wrong?" Economic Affairs, June 2011 (Vol. 31):

Krugman writes as if the volatility of stock prices alone disproves market efficiency, and believers in efficient marketers [sic] have just ignored it all these years.  This is a canard that Krugman should know better than to pass on, no matter how rhetorically convenient.  There is nothing about 'efficiency' that promises 'stability'.  Stable price growth would in fact be a major violation of efficiency as it would imply easy profits.