Asset price swings risk and the role of the state publisher princeton university press year 2011 roman frydman and michael goldberg argue is that both the rational and behavioral theories of the market rest on the same fatal assumption that markets act mechanically and economic change is fully predictable in beyond mechanical markets frydman and goldberg show how the failure to . Beyond mechanical markets asset price swings risk and the role of the state book review abstract in its opening section frydman and goldbergs book lays out important methodological contributions questioning the hypothesis of rational expectations constructed on the basis of the writings of knight keynes and hayek but in the second . Inbeyond mechanical markets frydman and goldberg show how the failure to abandon this assumption hinders our understanding of how markets work why price swings help allocate capital to worthy companies and what role government can and cant play. In beyond mechanical markets frydman and goldberg show how the failure to abandon this assumption hinders our understanding of how markets work why price swings help allocate capital to worthy companies and what role government can and cant play the financial crisis frydman and goldberg argue was made more likely if not inevitable by contemporary economic theory yet its core tenets . Beyond mechanical markets asset price swings risk and the role of the state by roman frydman and michael d goldberg princeton university press princeton 2011 pp xv 285 timo henckel centre for applied macroeconomic analysis australian national university