Why so gloomy?

Bubbles can be beautiful.



5 Responses to “Why so gloomy?”

  1. Gravatar of Edward Edward
    3. September 2013 at 17:14

    I didn’t know he was such a caddish pervert. It makes him more interesting in my opinion

  2. Gravatar of ssumner ssumner
    4. September 2013 at 05:44

    Edward, Yup, he’s more interesting that I thought.

  3. Gravatar of Saturos Saturos
    4. September 2013 at 06:45

    Is this story for real? Reads like an Onion piece.

  4. Gravatar of ssumner ssumner
    4. September 2013 at 16:24

    Saturos. It’s the New York Post!! 🙂

  5. Gravatar of Floccina Floccina
    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.

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