Two "Efficient Market Hypotheses"

A failure to distinguish between the no-free-lunch and the price-is-right versions of the efficient market hypothesis has been the source of a great deal of very bad economics over the past generation:

What Thaler Said: The [Efficient Capital Markets] hypothesis has two parts, [Richard Thaler] says: the “no-free-lunch part and the price-is-right part, and if anything the first part has been strengthened as we have learned that some investment strategies are riskier than they look and it really is difficult to beat the market.” The idea that the market price is the right price, however, has been badly dented...