Asset Price Bubbles and Financial Markets
Crisis Commentary Lecture
Thursday, 10 September 2009
Dr Stephen Kirchner and Dr Jason Potts
Running time: 61 mins
'Bubbles', or episodes of pronounced asset price inflation and deflation, have occurred in a wide-range of markets in recent years. Bubbles are characterised by irrational or herd-like behaviour, resulting in asset prices becoming disconnected from fundamentals. What constitutes a bubble? How should policymakers respond to them? Are bubbles ultimately harmful or just symptomatic of the innovation and entrepreneurship essential to long-run economic growth?
Dr Stephen Kirchner, Research Fellow at the Centre for Independent Studies and author of the CIS Policy Monograph Bubble Poppers: Monetary Policy and the Myth of ‘Bubbles’ in Asset Prices and Dr Jason Potts, senior Economics lecturer at the University of Queensland, discuss this issue.
