an unstable boom based on speculation in stocks, often followed by a financial crash. This happened, for example, in the 1630s in the Netherlands and in the 1720s in England.
The Economist magazine, In April 1998, took the position that the economy of the United States was a bubble that needed bursting by increased interet rates. Nearly a year and half later, stock prices have generally continued to climb, and the analogy of a bubble still seems valid. A stock...
If the Fed had popped America's bubble sooner, its economy would be healthier SINCE early 1998 The Economist has repeatedly argued that the Federal Reserve should have tightened policy sooner to let some air out of America's economic and financial bubble. This view won...
Soaring US stock prices are the result of a serious 'asset-price bubble,' which poses a threat to the world economy. If the bubble bursts suddenly, financial instability and recession are likely. Or, if asset-inflation spreads, the result may be consumer-price inflation. The Fed needs to pop it, and the sooner...
The most important debate now going on among economists is whether the economy and the stock market reflect a new era or a bubble that likely will burst. New-era advocates believe that computers and the Internet have fundamentally changed the economy and stock market valuations permanently. Those who support the...
Then, as now, asset values rose to stratospheric heights. Then, as now, the bubble eventually popped. And then, as now, people initially believed the economy would soon regain its bearings. But in post-bubble Japan, the economy didn't recover as expected. Instead, it stagnated -- year after...
Stock market movements are usually interpreted as reflecting exogenous changes in perceived or real productivity, while budget deficits are usually understood as a mainly political decision. The paper challenges this view here and develops two alternative interpretations. Both are based on the notion that a bubble the 'dot-com' bubble) has...
Pat McGovern, the head of publishing powerhouse International Data Group (disclosure: I once worked for an IDG unit), was a keynote speaker at the off-the-record Nantucket Conference this past weekend. But he gave me permission to cite his comments on the next technology bubble. McGovern's probably...
By Andrew Countryman, Chicago Tribune Knight Ridder/Tribune Business News Aug. 25--First, there was the tech stock bubble. Then came fears about a real estate bubble, although the jury is still out on that one. Now, economists and stock...
Befuddled by the stock market? Don't understand why shares of unprofitable Internet companies are soaring ever higher while shares of old economy titans like General Motors go begging? You have some good company. The man who managed the U.S. economy for most of the 1980s is as...
For those people who default on their homes, or are forced by family or business situations to put their homes on the market and move in short order, it could get ugly. JUST AS THE STOCK MARKET BUBBLE ARTIFICIALLY prolonged the U.S. economic expansion...
The bull market and easy credit have caused a bubble economy in the US that creates risk of a sharp slowdown and possible recession. The view that the US expansion can continue indefinitely relies too much on faith in the powers of central banks, which lack the ability to control...
What caused the great Internet bubble and the bull market that accompanied it? Alan Greenspan's Federal Reserve. And when the Fed attempted to slow the economy, it burst the bubble and triggered the current slowdown. According...
NEW YORK -- In all the talk at their annual meeting about the U.S. economy and what keeps it so robust, the nation's economists gave short shrift to one concern -- that the soaring stock market might be a speculative bubble that could burst, damaging the economy. The...
WASHINGTON AFP — A Federal Reserve official said that the US real estate market may be influenced by a "bubble," but that the economy remained on a solid path. Janet Yellen, president of the San Francisco Fed, said housing remains among the "downside risks" to economic growth. "This...
THREE weeks ago, The Economist suggested that America is experiencing an asset-price bubble. The thought has provoked both debate and abuse. Now, the "B-word" itself risks falling victim to speculative excess. Over those three weeks Wall Street has fallen, then rebounded to a new high as...
Stock picker extraordinaire Jim Cramer is a believer, but Fed Reserve chairman-elect Ben S. Bernanke isn't.The debate over whether there's a housing market bubble-after five record-breaking years-reached new heights last quarter with various reports of softening demand. "People throw the 'bubble' word around," sniffs Frank Nothaft, a chief economist at...
WASHINGTON -- Federal Reserve Chairman Alan Greenspan defended himself Saturday against a criticism of his tenure, saying policy- makers would have damaged the economy in the late 1990s had they tried to burst that era's speculative stock market bubble. "The notion that a well-timed incremental tightening could...
Alan Greenspan's victory lap is premature IN 1998 and 1999 The Economist argued that the Federal Reserve should tighten monetary policy to let some air out of America's economic and financial bubble. At the time, most commentators denied that a bubble even existed. Most...
Should central banks try to target asset-price inflation? THREE weeks ago The Economist suggested that a bubble economy was developing in America; we urged the Federal Reserve to raise interest rates. This has prompted much debate about whether Wall Street is really overvalued, and whether America's...
This paper investigates the institutional causes of the Japanese Depression in the 1990s in comparison to those of the America Great Depression in the 1930s. The Japanese Depression has two similarities to the American Depression. (1) Both depressions followed the bubble economy. (2) The decades of the 1930s and 1990s...
