In 1996, Mr Greenspan famously warned that the stock market was suffering from ‘irrational exuberance’, but the stock market boom continued.
And when the stock market crashed in 2000, the house price boom began, both in the US and the UK.
Mr Greenspan now says that he was perhaps a little too cryptic in his warnings about the ‘frothy’ nature of these asset bubbles.
But, he argues, there is little central bankers could have done to prevent asset bubbles from forming in the economy.
He says the bubbles were a side-effect of their successful efforts to keep interest rates low.
Apesar das bolhas serem um “efeito secundário” da política monetária do FED, além de avisos pouco mais Greenspan podia fazer? Pois…
Aos menos informados, cito um entre muitos artigos no Ludwig von Mises Institute:
The [Austrian theory of the trade cycle] begins by observing the profound effect that interest rates have on investment decisions. Left to the market, interest rates are determined by the supply of credit (a mirror of the savings rate) and the willingness to takes risks in the market (a mirror of the return on capital). What throws this out of whack is manipulation by the central bank.
When the Fed feeds artificial credit into the economy by lowering interest rates, it spurs investments in projects that don’t eventually pan out. In this economic boom, the high-tech and dot com manias resulted from a decade of sustained money growth via lower interest rates. When the Fed stepped on the brakes to prevent prices from rising, it prompted a sell-off, and hence a downturn.
What’s tricky to understand is what can’t be seen. Just because prices aren’t going up doesn’t mean the money supply is in check. Just because people in some sectors are getting rich doesn’t mean that the prosperity is on solid ground. Just because the stock market is going up doesn’t mean that the architecture of investment (…) is in good working order.
Leitura complementar: “Does Austrian Business Cycle Theory Help Explain the Dot-Com Boom Bust?” (pdf)