IntroductionIt was previously assumed that economic investors and regulators (agents) used all available information and that market prices were therefore a reflection of these information with assets representing their fundamental value, encouraging the position that the agents' actions were rational. The Global Financial Crisis (GFC) of 2007-2008 allegedly stemmed from the idea that all available information was used, which prevented agents from thoroughly investigating and confirming "the true value of publicly traded securities." , which led to a registration failure. the presence of an asset price bubble preceding the GFC (Ball 2009). This essay will use EMH notions to determine the extent to which they can explain the global financial crisis using the United States as a case study. Efficient Market Hypothesis Fama proposed the EMH, in 1965, stating that provided all available information is used, market prices will reflect reasonably accurate approximations of the inherent current value of securities; using this information would make the agents' actions rational. Ball expands on this point by suggesting that competitive markets incur costs proportional to the use of information. The question proposed by EMH is therefore: why did the GFC occur if agents use every piece of information at their disposal and how can we rely on this information? Do notions of EMH contribute to stock market crashes? Ball makes an important point by suggesting that the revelation of new information causes market prices to fall due to reevaluated expectations. In the case of the 2007-2008 GFC, subprime mortgages were allowed, which led to asset price bubbles: an overlooked feature of the market seen as a major cause of funding... middle of paper..... .cmillan, 2007. http://web.mit.edu/alo/www/Papers/EMH_Final.pdf (accessed April 7, 2014). Mishkin, Frederic S. Board of Governors of the Federal Reserve, “How Should We Respond to Asset Price Bubbles?” Last modified May 15, 2008. Accessed April 12, 2014. http://www.federalreserve.gov/ newsevents/speech/mishkin20080515a.htm.Muth, John F. “Rational Expectations and the Theory of Price Movements.” No. 3 (1961): 315-335. (accessed April 6, 2014). Trading Economics, “US GDP REVISED UP TO 2.6% IN Q4 Accessed April 10, 2014. http://www.tradingnomics.com/united-states/gdp.” -growth.US Department of Labor: Bureau of Labor Statistics, "US GDP REVISED UP TO 2.6% IN Q4". Last modified April 11, 2014. Accessed April 11, 2014. Statistics on working population from the Current Population Survey.