Mises Daily
Author:
Frank Shostak
Online Publish Date:
since their balance sheets are in good shape. Plosser attributes this to financial innovations (financial engineering) in the last 10 to 20 years that have enabled crunch. The deflation of the bubble is the result of the Fed’s boom-bust monetary policies. Here is why. We define a bubble as activity that has emerged on the back of the loose monetary policy of the central bank. In the absence of monetary pumping this type of activity