Fighting Bubbles: High Interest Rates Are Not the Best Route

Ruchir Sharma, the chief global strategist at Morgan Stanley Investment Management, used his NYT column to argue that central banks have to include fighting asset bubbles on their agenda, in addition to promoting high employment and low inflation. As someone who has argued this for two decades, I am sympathetic to the point, however Sharma gets a couple of big things wrong.

First, the big issue with bubbles is whether they are moving the economy. This is something that is easy to determine fo...