Ketchup Economics and Financial Economics

Krugman in his long overview on state of macro says:

Larry Summers, now the top economic adviser in the Obama administration, once mocked finance professors with a parable about “ketchup economists” who “have shown that two-quart bottles of ketchup invariably sell for exactly twice as much as one-quart bottles of ketchup,” and conclude from this that the ketchup market is perfectly efficient.

Those interested in this short-paper of Summers can read it here. Though the comments may sound funny but is quite thoughtful on financial economics.

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