Monday, June 29, 2009

Vox: Calvo and Roo-King on Bubbles

How bad are bubbles for welfare is the question asked by Calvo and Roo-King in a recent Vox post. "This column weighs the costs and benefits of financial deregulation that spurs temporarily high growth that then collapse and suggests that bubbles may be socially efficient." They suggest that sometimes the benefits from creating a bubble that subsequently bursts may be higher than not having finance-led growth in the first place.

link here

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