A Practical Anti-Bubble Prescription
9 Pages Posted: 30 Jul 2012 Last revised: 11 Sep 2012
Date Written: July 27, 2012
We argue that coordinated mass dissemination of information about asset fundamentals should make asset markets less prone to bubbles. The key idea is to establish a centralized and popular information source to make key information common knowledge across as many market participants as possible. This realistic, micro-level anti-bubble policy faces fewer challenges than monetary policy and macro-prudential tools.
Keywords: bubbles, real estate bubble, housing bubble, stock market bubble
JEL Classification: G28, G14, E52
Suggested Citation: Suggested Citation