In times of the global economic crisis when free market has received a battering and the competence of economists has been challenged, an Economics Nobel laureate has jumped to the defense of both.

Myron Scholes, professor of finance at US' Stanford University and 1997 Economics Nobel winner, delivered a speech at Peking University's Guanghua School of Management on Oct 7, enumerating the causes behind the global financial crisis and how the market can facilitate a true recovery.

Addressing a packed auditorium, he said "green shoots" has become a trendy phrase this year, and people are talking about signs of economic recovery. But government-funded economic recovery is like planting a plot with grass in a desert and watering it. Surely, the grass will grow, but what about the rest of the desert?