Asset Bubbles Presentation

     The recent world wide recession has focused attention on the role of asset price bubbles and what, if anything, policymakers should do to stem their effect on the global economic landscape.  The boom in home prices around the world from 2000 to 2006 is our most recent bubble bursting episode. House prices rose far more than the underlying fundamental drivers of home prices such as family income and rents. The bursting of the bubble then lead to a sharp rise in international foreclosures and massive declines in the values of mortgage backed securities which then lead to a broader sell off in most every asset class as investors rushed to safety. The collapse in prices led to the weakening, and in some cases, the collapse of major financial institutions around the world. All of this has led to one of the most serious recessions in the entire post World War II period. 


Here are my slides for my presentation Asset Bubbles