“Much of the research of the past forty years has focused on assessing market behavior in the presence of rational expectations, where individuals use all available information to make inferences about the future, and in which all individuals share the same beliefs. And much of the literature has focused on situations where, even though there may not be a complete set of markets, there are not constraints, such as on short sales. In practice, of course, individuals do differ in their beliefs.” – Joseph Stiglitz
This week we are excited to feature The Kenneth J. Arrow Lecture Series, edited by Joseph E. Stiglitz, and are giving away free copies of the first three books in the series (Creating a Learning Society: A New Approach to Growth, Development, and Social Progress, by Joseph Stiglitz and Bruce Greenwald; Speculation, Trading, and Bubbles, by José Scheinkman; and The Arrow Impossibility Theorem, by Eric Maskin and Amartya Sen) in our book giveaway! Today, we are focusing on Speculation, Trading, and Bubbles in particular. In this post, we are happy to present Joseph E. Stiglitz’s introduction to José Scheinkman’s book.