Sunday, June 19, 2011

The evolution of a financial asset bubble

(HT: Chris F Masse, Via MR)

1 comment:

sai prasad said...

Do we have an estimate of how much growth is sustainable today ? I don t hink we have any such figure in front of us. Any estimate that we are likely to arrive at now is only likely to be an afterthought.

We have been having a higher growth rate for about five to six years so far now. Yet all the supply side constarints have not been addressed. I dont say any individual would need to do this, but the market has not been able to address the same.

Is it possible to address these supply constraints ? Some of these may have reached the ned of their tether?

Under a perfect balance of demand and supply, we would expect close to zero inflation. This also does not seem to have happened in a big way in recent times.

Has such mangement been effective so far, or have reasons been ascribed after the inflation has actually come down for reasons not fully known ?

I only have questions as do most people. I dont have answers.

Your supply side argument does seem to have merits though.