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Different proponents of efficient market hypothesis (EMH) will have different explanations because EMH does not say which fundamentals/variables should drive prices. EMH just states that prices reflect avaiable information but it does not say which avaiable information is important and which isn't. There are actually several versions of efficient market ...

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There are economists who argue that market for organs would be efficient and would improve the allocation of cadavers saving lives. There also good arguments for them leading to Pareto improvements although you should note that market does not necessary have to be strictly pareto-optimal for it to be desirable. Often in public economics it is enough to show ...

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Efficient market hypothesis does not in itself predict that stock market returns will equalize among different stock markets so it should not really be part of the question (efficient market hypothesis only refers to informational efficiency of markets). Rather this is something that would be predicted by trade/international macro models that predict factor ...

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Your figures reports ex-post (say end of year) returns on capital investments. Ex-ante (beginning of the year, or before the investment) these returns are random and unknown, and there is a trade-off between return and risk. If investor $i$ is investing rationally her assets in firm $j$ instead of $k$, according her specific risk aversion and information set ...

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The efficient market hypothesis does not require everyone being omniscient. It works through the supply/demand and price mechanism. For example, imagine that you have private information that a company X is doing bad (without being a manager or other person banned from insider trading). If company X is doing bad then sooner or later it’s stock price will ...

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