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Embrace the Bubble

Posted on June 13, 2008

Business Week s Chris Farrell, on why we should welcome so-called bubbles in asset prices as a normal part of the functioning of a market economy:Let s go back to the dot-com example. What s remarkable is just how quickly the Internet economy was established during that so-called era of fictitious value. The conventional wisdom is that the period of exuberance during the boom period especially 1999 and 2000 was a bubble, writes BusinessWeek Chief Economist Michael Mandel in his book Rational Exuberance. It carries connotations of something fragile, which was never quit...

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economy