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2. The bubbly asset price spurs clusters of production, which help overcome the fixed costs of innovating with a new technology. I am reminded of Andrei Shleifer’s seminal work on implementation cycles.
Also, the USA has had bubbles but there are no bubbles in North Korea and Cuba just a nice slow steady decline, now where would you prefer to be? Bubbles can be welfare enhancing especially for the poor.
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About
Welcome to a new blog on the endlessly perplexing problem of monetary policy. You’ll quickly notice that I am not a natural blogger, yet I feel compelled by recent events to give it a shot. Read more...
My name is Scott Sumner and I have taught economics at Bentley University for the past 27 years. I earned a BA in economics at Wisconsin and a PhD at Chicago. My research has been in the field of monetary economics, particularly the role of the gold standard in the Great Depression. I had just begun research on the relationship between cultural values and neoliberal reforms, when I got pulled back into monetary economics by the current crisis.
"This man is the devil. Look at his eyes. Same as Soros. All baggy and nasty. Good people dont age like that. Its the sign of a madman. A negativity..."
"I watched Satantango on video over 3 days. I found it absolutely gripping, but one must surrender for a time one's idea of what a movie should be. Instead, you..."
3. September 2013 at 17:14
hilarious!
I didn’t know he was such a caddish pervert. It makes him more interesting in my opinion
4. September 2013 at 05:44
Edward, Yup, he’s more interesting that I thought.
4. September 2013 at 06:45
Is this story for real? Reads like an Onion piece.
4. September 2013 at 16:24
Saturos. It’s the New York Post!! 🙂
6. September 2013 at 10:16
1. The bubbly asset price spurs overoptimistic innovators, thus counteracting the tendency to underinvest in new ideas (which are public goods to some extent)
2. The bubbly asset price spurs clusters of production, which help overcome the fixed costs of innovating with a new technology. I am reminded of Andrei Shleifer’s seminal work on implementation cycles.
Also, the USA has had bubbles but there are no bubbles in North Korea and Cuba just a nice slow steady decline, now where would you prefer to be? Bubbles can be welfare enhancing especially for the poor.