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Bubbles in sentence

660 examples of Bubbles in a sentence

Some have attributed the rise to bubbles in commodities prices, owing to low interest rates and easy access to credit for commodity speculation.
Deluded by the convergence of bond yields that followed the euro’s launch, investors fed a decade-long private-sector credit boom in Europe’s less-developed periphery countries, and failed to recognize real-estate bubbles in Spain and Ireland, and Greece’s slide into insolvency.
Already, this effect has kept consumer- and producer-price indices from rising, despite monetary easing, while inflating asset-price bubbles.
By conflating QE-induced wealth effects with the effects on borrowing costs that arise through conventional channels, Bernanke conveniently sweeps aside most of the risks described above – especially those pertaining to asset bubbles and excess leverage.
Macro-prudential policies are not a substitute for sound macroeconomic policies; nonetheless, they are essential to preventing large asset bubbles and distortions in financial markets, and thus to reducing the risk of adverse shocks to both markets and the real economy.
Moreover, as we enter the eighth year of aggressive easing, unintended consequences are starting to appear – notably asset-price bubbles, increasing economic inequality (as wealthier investors able to hold equities benefit at the expense of small savers), and the risk of higher inflation in the future.
On one hand, policy must fuel asset bubbles to keep the economy growing.
On the other hand, such bubbles inevitably create financial crises when they eventually implode.
In effect, the new cycle locks the Fed into an unstable stance whereby it must prevent asset price declines to avert recession, yet must also promote asset bubbles to sustain expansions.
That way, China can avoid the kinds of asset bubbles that swelled in the last several years, when rapid credit growth failed to support the real economy.
At the risk of oversimplifying, the gist of these arguments is that ample and inexpensive credit inflates asset-price bubbles, encourages excessive risk taking, drives up leverage, and may even delay necessary economic reforms.
In other words, financial markets are prone to produce bubbles.ampnbsp;
Because financial markets are prone to create asset bubbles, regulators must accept responsibility for preventing them from growing too big.
Of course, it is impossible to prevent bubbles from forming, but it should be possible to keep them within tolerable bounds.
That is why asset bubbles could grow so large during his tenure.
So, even in the so-called boom years, most Western economies were kept afloat not by new investment, but by asset bubbles based on increasingly unsustainable leverage.
An example of a red policy would be when unconventional monetary policies do little to boost a country’s domestic demand – but lead to large capital outflows that provoke asset-price bubbles in emerging markets.
It appears that the flood of liquidity has disproportionately gone toward creating financial wealth and inflating asset bubbles, rather than strengthening the real economy.
This knee-jerk reaction presumes that China’s current slowdown is but a prelude to more growth disappointments to come – a presumption that reflects widespread and longstanding fears of a broad array of disaster scenarios, ranging from social unrest and environmental catastrophes to housing bubbles and shadow-banking blow-ups.
But now reflation may be creating asset-price bubbles, and the hope that macro-prudential policies will prevent them from bursting is so far just that – a leap of faith.
Reinhart and Rogoff describe a “this time is different syndrome” during the pre-crisis boom, whereby these bubbles are allowed to continue for far too long, because people think that past episodes are irrelevant.
According to “rational expectations,” bubbles simply did not exist – which meant that actual bubbles were allowed to grow.
But that mindset is waning, and government and business leaders now routinely warn of bubbles and adopt policies to counter them.
They cite the dangers of volatile capital inflows, commodity-price fluctuations, and local-currency appreciation, as well as the attendant risks of asset bubbles and inflation.
Politics aside, property bubbles leave in their wake a legacy of debt and excess capacity in real estate that is not easily rectified – especially when politically connected banks resist restructuring mortgages.
In both Europe and America, the free-market ideology that allowed asset bubbles to grow unfettered – markets always know best, so government must not intervene – now ties policymakers’ hands in designing effective responses to the crisis.
When both bubbles burst – first housing, and then credit – asset-dependent US consumers were exposed to the American strain of the Japanese disease first diagnosed by Nomura economist Richard Koo.Koo has stressed the lingering perils of a balance-sheet recession centered on the corporate sector of the Japanese economy; but the analysis is equally applicable to bubble-dependent US consumers.
More and more people are claiming that markets are characterized by irrationality, bubbles, fads, and frenzies, and that economic actors are driven by behavioral biases.
Second, predicting the exact timing of a break point (when bubbles burst, markets lock up, and credit freezes) is, and will likely remain, beyond our ability.
Asset bubbles are hard to identify with certainty.
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