Evans, Charles

The literature on asset bubble pricking is related to this discussion of excess risk-taking: Should a policymaker deflate a bubble before it becomes problematic? I am skeptical that we can identify bubbles with enough accuracy and know enough about how to act to say that we wouldn't have more failures than successes. ... [A]s former Chairman Greenspan [2004] noted, in order to make sure you burst a bubble, you have to attack it aggressively, because if your attack fails, it just gets bigger. And there are big risks to the real economy of making such large moves.