Read Chps. 7-11 of Cassidy and do essay assignment

Today:

Finish first part of Lecture 1 on efficient markets/inefficient markets (we will start again on bubbles)
Discuss Cassidy reading:

Explain Adam Smith’s invisible hand idea.
Why is there a spontaneous order that comes out of the pricing system (according to Smith)?
Why did Smith think that banking needed to regulated?
How does general equilibrium theory support the idea of the invisible hand?
What did later researchers (from the 1970’s) find out about general equilibrium theory?
How are the assumptions in the Arrow-Debreu model inconsistent with reality?
Why did Milton Friedman become so famous and his views on economics so popular?
Discuss Hayek’s view on how prices were a telecommunication system.
What was Hayek’s view of recessions?