Economic Downturn and Efficient Market Hypothesis: Lessons so Far for Ghana

Posted: 16 Sep 2011

Date Written: September 15, 2011


Like all good theories, market efficiency has major limitations, even though it continues to be the source of important and enduring insights. This is a conceptual framework on global financial crisis and Efficient Market Hypothesis. Despite the theory’s undoubted limitations, the claim that it is responsible for the current worldwide crisis seems wildly exaggerated. This paper discusses many of those claims. It was identified that many of theses claims were without merit and what developing economies need to consider and worry about is how they can strategize well to insulate themselves from the effects of global financial crisis whenever they arise and even capitalize on it to reap maximum benefits from the situation. Since African stock markets are seen to be providing investors in the developed economies the benefits of portfolio diversification, Ghana should be thinking of what they can benefit from the crisis which we refer to as an opportunity in this paper. Leaders in emerging economies should not sit aloof and believe that the adverse impact is certainly going to affect their economy but they should rather focus on minimizing the effects and taking advantage of the distortions in the developed economies.

Keywords: Financial Crisis, Efficient Market Hypothesis, Ghana

Suggested Citation

Winful (PhD), Prof Ernest Christian and Sarpong, David and Agbodohu, William, Economic Downturn and Efficient Market Hypothesis: Lessons so Far for Ghana (September 15, 2011). Available at SSRN: or

Prof Ernest Christian Winful (PhD) (Contact Author)

Accra Technical University


David Sarpong

Accra Polytechnic ( email )

Barnes Road

William Agbodohu

affiliation not provided to SSRN

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