Are Finance Professors and Their Theories to Blame for the Financial Crisis?

Robert Merton in 1985:

If, however, the rationality hypothesis is sustained [and he is assuming it will be] then instead of asking the question “Why are stock prices so much more volatile than (measured) consumption, dividends, and replacement costs?” perhaps general economists will begin to ask questions like “Why do (measured) consumption, dividends, and replacement costs exhibit so little volatility when compared with rational stock prices?”

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