August 5, 2021

Will asset-price bubbles burst and tear down the economy? Here’s what leading luminaries say.

It’s the time of year for the summer’s hottest read — not the Sports Illustrated swimsuit issue, but the summer edition of The International Economy.

And it’s a pretty juicy question posed to 21 economic luminaries — “on a scale of one to 10, what are the risks of a bursting asset bubble?”

Jeffrey Frankel of Harvard University responded with a nine. He cited four examples of where he sees “egregious” bubble behavior — in cryptocurrencies like bitcoin
the run-up in videogames retailer GameStop’s

stock, the phenomenon of non-fungible tokens and the boom in special-purpose acquisition companies, which he compared to the infamous South Sea Bubble.

Former Austrian central bank chief Ewald Nowotny also was in the nine camp, worried about real estate as well…

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