Thursday, 11 June 2009

Friendly fire

Sorry to knock the team, but who does this make you think of?
Manias generally have been associated with the expansion phase of the business cycle, in part because the euphoria associated with the mania leads to increases in spending. During the mania the increases in the prices of real estate or stocks or in one or several commodities contribute to increases in consumption and investment spending that in turn lead to accelerations in the rates of economic growth. The seers in the economy forecast perpetual economic growth and some venturesome ones proclaim no more recessions - the traditional business cycles of the market economies have become obsolete.
From Manias, Panics and Crashes: A History of Financial Crises

2 comments:

Nick Drew said...

but GB is either a towering economic genius or he's nothing: so it can't be him you're thinking of ...

Tom P said...

perhaps with the benefit of hindsight the whole 'end to boom and bust' claim was a little bit excessive