I added the below in an update to my original post, but I want to make sure y’all see this one:
Thanks to the sleuthing of Dan, we are able to produce the following work of beauty:
(A) “I’m a believer in the EMH and hence skeptical of the idea of bubbles, a least as the term is usually interpreted. But I’m in the minority, the vast majority of people think bubbles exist.” — Scott Sumner, 9/7/2011.
(B) “Next we have to discuss what we mean by ‘bubble.’ Most people mean a sharp rise in prices, followed by a big decline. I agree with most people.” — Scott Sumner, 1/12/2012
(C) “I am constantly amazed that so many highly intelligent economists and finance-types seem incapable of understanding something as simple as an asset price bubble…[My argument] means that if bubbles are big price advances followed by substantial declines, then a world without bubbles would violate the EMH. Which means asset price bubbles do not violate the EMH.” — Scott Sumner, 8/9/2012
I submit that there are only two ways to reconcile (A) through (C):
Door #1: Sumner claims that not just his definition, but the definition of “bubble” used by most people, has changed during the last 11 months.
Door #2: Sumner claims that a “sharp rise in price, followed by a big decline” is quite a different thing from “big price advances followed by substantial declines.”
My work is done here.