Should
central banks intervene to burst asset price bubbles?
In this nine-minute video, Adam Posen of the MPC argues that central banks
should not intervene to prick booms as not all booms are followed by a
bust. In other words, central banks
cannot identify ex ante if a boom is an asset price bubble.
According to Robert Shiller , speaking at Davos, Bitcoin is a perfect example of a bubble - story here . Shiller sees Bitcoin as a backwards step in the evolution of money. George Selgin , a free banker, takes an opposing view - click here . Although he doesn't believe that Bitcoin is money, he sees its development as a fascinating turn in the evolution of money. In particular, he lauds the fact that Bitcoin production is constrained and cannot be infinite. There is a short video below where Bitcoin explain how it works.