Mean Reversion and the Permanent Income Hypothesis, by Bryan Caplan

Here's a question from my last Ph.D. Microeconomics exam.  Post your answers in the comments, and I'll share my suggested answer tomorrow.

Suppose you - and
you alone - discover that the stock market is mean-reverting.  

True, False, and Explain:  If you are rational, you will NOT obey the
permanent income hypothesis.

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