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Economists call the widespread belief that our markets are self-correcting and self-stabilizing the “Efficient Market Hypothesis.” And according to George Cooper’s spare and cogently book The Origin of Financial Crises, EMH is what caused the world’s economies to grow so bloated, and collapse so suddenly.

In fact, Cooper argues, markets are unstable, irrational, and subject to forces that can spiral quickly out of control. (See: bank runs.) And so, instead of encouraging more credit creation through inflation and easing interest rates, central banks should temper unchecked growth and burst mini-bubbles as they pop up, with frequent and precise adjustments in interest rates. By now, facts, pink slips and a broken down DOW have all but buried the theory that Cooper set out to destroy, turning his book into an elegant, highly efficient coup de grace.

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