…a higher public debt to GDP ratio, via a shrinking GDP. Undoubtedly, some government expenditure is highly inefficient (although, in light of the plethora of private sector induced debt bubbles,…

…biggest bubbles of all time in your own economy or in a major trading partner’s, don’t count on recovery in the face of fiscal retrenchment. The UK government’s current monomaniacal…

…prices: speculation is reducing supply and leverage is increasing demand. The Bust Housing “bubbles” typically do not “pop”, rather prices deflate slowly in real terms, over several years. Historically real…

…for talking about the fact that without stabilizing intervention and protective regulation, market pricing–and the kinds of speculation that Duffie praises–tends to lead to market bubbles. The housing markets are…

…price bubbles as a result of last year’s aggressive expansion of credit.” Less credit = smaller growth rates. And it’s not just “markets” that are worried about the slowdown of…

Robert Waldmann This is a brief follow up on my post on measuring bubbles. The amount lost due to sub-prime mortgages in default is tiny compared to the damage done….

…in spite of the bubbles and wealth talk in China, confidence hasn’t been this low since 2003. In Brazil, consumer confidence is back to peak levels before the onset of…

…here, and US Flow of Funds data here. The chart above illustrates the debt bubbles in the US financial crisis and in 1990’s Japan. In Japan, the households didn’t accumulate…

…prices away from fundamental values causing bubbles and crashes. The two views are logically inconsistent, since the second criticism asserts that speculation reduces total wealth. I think disapproval of the…

…excerpt from the article: After Japan’s bubbles burst, private nonfinancial firms undertook a massive deleveraging, reducing their collective debt-to-GDP ratio from 125% in 1991 to 95% in 2001. By reducing…