In Defense of Bubbles…

If there's one subject I've bored New Yorker readers with more than any other over the past decade or so, it's the dangers of speculative bubbles. When I first started banging on about this subject, back in the late nineteen nineties—see, for example, this piece from 1997—nobody took much notice. Back then, many economists, including Fed Chairman Alan Greenspan, were skeptical about the very existence of bubbles. Even if they did exist, it was widely believed that they didn't present much...