Money, Credit, and the Bubble Economy Metaphor
December 9, 1998
The metaphor "bubble economy" suggests that something is functioning as air -- an element which in everyday language is taken to lack substance. The logical candidate is money (and credit). If the bubble economy was caused by money and credit expansion, there are some well known remedies, such as transparency and freedom to compete in banking and credit. Central bank regulation of financial institutions may also be a remedy, if the political system can produce independent, competent, and honest central bank managers.
Gunning’s Address
J. Patrick Gunning
Visiting Professor
U.S. Coast Guard Academy
Management Department
15 Mohegan Avenue
New London, CT 06320
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