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John H Cochrane

Why Identifying a Bubble Is So Much Trouble: John H. Cochrane

We seem to be surrounded by “bubbles” -- tech stocks, real estate, and now maybe sovereign debt.

You might expect that any textbook would have a precise definition of this phenomenon; some set of characteristics that distinguish sensible high prices in good times from prices that are “too high” or in a “bubble.” Alas, “bubbles” seem to