This is that special time of year when MarginalRevolution destroys Free Advice in not only objective but also subjective value. Alex and Tyler have so many posts on the new economics laureates that I would just direct you to MR on October 14, 2013.
The most obvious reaction is to ask: Did the committee just give the award to two guys who said the opposite thing? Namely, I am pretty sure all of the following are correct statements:
(1) Eugene Fama is the father of, and believe in, the Efficient Markets Hypothesis (EMH).
(2) Robert Shiller did not believe in the Efficient Market Hypothesis.
(3) Fama and Shiller shared the Nobel for their work on asset prices and financial markets.
Ishn’t zat veird? (Scott Sumner kinda sorta agrees.)
I never got into the technical papers on the EMH, so I do not feel competent to weigh in on them. I know there are varying strong and weak forms of the EMH, that it’s not merely a tautology, that they performed falsifiable tests, etc.
However, what I am confident in saying, is that when commenting on the economy for a lay audience, the believers in the EMH use it in a non-falsifiable way. That would be fine, except that they don’t realize they’re doing it.
My two articles (here and here) lay out exactly what I mean by such an accusation. If you’ve been reading me a while, you know that I am the epitome of humility, but those two articles I just linked are really awesome, incidentally.