In certain circumstances, financial markets can affect the so-called fundamentals, which they are supposed to reflect, he said: “When that happens, markets enter into a state of dynamic disequilibrium and behave quite differently from what would be considered normal by the theory of efficient markets.” According to him, “Such boom or bust sequences do not arise very often, but when they do, they can be very disruptive, exactly because they affect the fundamentals of the economy.” Like it happened in the case of Indonesia when financial crisis changed into a political crisis, he pointed out.
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