Archive for the ‘Books’ Category

Greenspan on Bubbles

December 12, 2007

In today’s opinion section of the WSJ, Alan Greenspan provides his perspective on the housing bubble in “The Roots of the Mortgage Crisis” . Greenspan summarizes the relationship between the fall of communism, the ascent of free markets world-wide (especially in developing countries such as China), and the reduction in long-term interest rates. His perspective on bubbles is closely tied to his explanation of the “Conundrum” – central banks can not easily affect long term rates. All of these points are outlined in more detail in his book.


Greenspan – Insights from History

December 8, 2007

I highly recommend Alan Greenspan’s “The Age of Turbulence”. Greenspan interprets recent economic history through the eyes of an astute, well-read and widely-traveled economist. He is an admirer of former Presidents Gerald Ford, Ronald Reagan and Bill Clinton. He explains his famous 2004 “Conundrum”. You may recall that Greenspan referred to the inability of Federal Reserve tightening to affect long term rates a “Conundrum”. He later reflected that the effect of economic globalization and its disinflationary impact was the cause of the “Conundrum”.