Crunch Time —Polischuk

Alan Greenspan touched on the human element when he coined the term “irrational exuberance” in a speech in December 1996. “But, how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? … We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability,” he said.