Tuesday 3 December 2002

How to come top of the class

A new course is to be taught at Edinburgh Business School and it will examine the causes of stock market bubbles and what lessons can be learned. The Scotsman article says:
The events of the past two years, says Napier (the project consultant), suggest that the accumulation of knowledge in the sciences may be cumulative "but in finance it remains cyclical".

Despite the explosion in financial analysis over the past 40 years and the emergence and development of portfolio theory, stock market manias and crashes seem to be as evident as ever.

Of course they are. These "manias and crashes" are the result of decades of government-created fiat monetary systems throughout the world. I would recommend that students (and lecturers) on the course consult the works of Ludwig von Mises and Murray Rothbard in which all will be revealed.