Wednesday, December 25, 2013

We should take care of a Bubble while it is Inflating

Historically there was an asymmetry: Ten years ago Bernanke and his predecessor Greenspan always said that there is nothing that can be done when a bubble is inflating, only after it burst could the Fed try to avoid collateral damage. I think one lesson from the crisis is that you should take care of a bubble while it is inflating. The debate is whether you should do it with interest rate policy or with macroprudential tools.

Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics
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