CAMBRIDGE: There is a reasonable chance that the U.S. economy is living through a speculative bubble of the same kind that has burst for so many other economies this past decade - Japan, Korea, Mexico, to name a few. These financial bubbles were all powered by an underlying myth of economic invisibility. The Japanese thought they had it ten years ago. Hard to believe, but many serious analysts thought Japan was on the verge of conquering the world economy at that time . . . that is, just before the Japanese stock market fell by more than 50 percent. Then Mexico thought that its new free trade arrangements with the U.S. would lead to a surge in economic growth . . . just months before the economy collapsed in the worst crisis in a generation.
CAMBRIDGE: There is a reasonable chance that the U.S. economy is living through a speculative bubble of the same kind that has burst for so many other economies this past decade - Japan, Korea, Mexico, to name a few. These financial bubbles were all powered by an underlying myth of economic invisibility. The Japanese thought they had it ten years ago. Hard to believe, but many serious analysts thought Japan was on the verge of conquering the world economy at that time . . . that is, just before the Japanese stock market fell by more than 50 percent. Then Mexico thought that its new free trade arrangements with the U.S. would lead to a surge in economic growth . . . just months before the economy collapsed in the worst crisis in a generation.